European Incumbents Hold the Line

August 1st, 2009 by · Leave a Comment

Earlier this week, three European telecommunications giants reported earnings, and all three defied the recession and posted pretty good numbers.  That’s not to say that things are wonderful, all three reported most metrics down from a year ago.  But all things considered, they held the line and maybe pushed back the gloom just a little bit.

Telefonica (NYSE:TEF, news, filings) reported revenues of €27.6B, OIBDA of €10.9B, and net income of €1.93.   Overall that was a bit better than most figured they would do. Lackluster performance in Spain and the rest of Europe was offset by some nice numbers coming out of Latin America, which is becoming a familiar story.   Telefonica’s commanding presence in the region gives them a growth engine that they will be riding for a long time.

Over at British Telecom (NYSE:BT, news, filings), the earnings report featured revenue of £5.2B and a profit of £214M. The global services division continued to struggle of course, shrinking by 4%.  But the good news is that there was no real news on that front, i.e. no further negative surprises.  In fact the company felt comfortable enough to claim progress in efficiency levels, although we will have to wait a while to see how that manifests itself in coming quarters.

France Telecom (NYSE:FTE, news, filings) reported second quarter EBITDA of €4.52B on revenues of &;euro;12.77B.  The company talked of ‘lower business’ in the second half and challenging conditions – but we already knew that.  The street took it as better than expected, and the company’s stock has surged in the last two days.

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Categories: Financials · ILECs, PTTs

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