Telefonica profits jump

May 16, 2001
Web posted at: 1017 GMT

LONDON (CNN) -- Spanish telecoms company Telefonica reported first-quarter net profits up  25 percent to 431.8 million ($377 million), meeting expectations.

Telefonica's results were expected to be hit by events in Latin America – where its operations suffered foreign exchange losses in Brazil and the Argentine economy slumped.

The company said the continent contributed 42 percent of earnings in the first quarter, compared to more than 50 percent normally.

Telefonica virtually matched the predictions of a Reuters poll of analysts that had put earnings before interest, tax, depreciation and amortisation (EBITDA) at 3.1 billion, sales revenue rising 18 percent to 7.6 billion and net profit up 26 percent to 436 million.

"The figures look pretty good and don't seem to diverge from expectations," Nigel Coby, an analyst with Deutsche Bank in London, told the news agency.

The former monopoly has been helped by the success of its wireless division, Telefonica Moviles, which reported first-quarter profits up 14 percent to 154.7 million last week. It sold shares in a flotation last year but still owns 90 percent of the company.

But Telefonica's Internet arm, Terra Networks, reported a first-quarter loss of 174.5 million this month.

Telefonica's shares were down 1.4 percent in morning trading in Madrid, matching falls in other telecom stocks across Europe.

Terra Lycos beats Street – Feb. 1, 2001

Telefonica

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