Brazilian telecom carrier
Telefonica Brasil SA
) reported fourth-quarter 2012 net income of R$1,474.3 million
($715.2 million), up by a marginal 0.8% year over year.
Revenue rose 3.6% year over year to R$8,910.3 million ($4,322.4
million), surpassing the Zacks Consensus Estimate of $4,125.0
For 2012, net income was R$4,452.2 million or $2,159.8 million
(down 12.2% from the prior year), on revenues of R$33,931.4
million or $16,460.1 million (up 2.3% year over year).
Consolidated EBITDA jumped 16.5% year over year to R$3,854.0
million ($1,869.6 million) in the fourth quarter, with EBITDA
margin standing at 43.3% was up 480 basis points (bps). Operating
expenses dropped 4.5% year over year to R$5,056.3 million
revenue climbed 10.7% year over year to R$5,823.2 million
($2,824.8 million) in the reported quarter, primarily driven by
data and value added service (VAS), and access and usage
Average revenue per user (ARPU) fell 2.8% to R$23.9 ($10.8), hurt
by a drop in interconnection rates. Customer churn upped to 4.1%
from 3.0% recorded in the fourth quarter 2011.
As of Dec 31, 2012, total subscriber base was 76.14 million (up
6.4% year over year). Post-paid and prepaid subscribers grew
16.7% and 3.4% year over year to 18.80 million and 57.33 million,
Fixed Line Business
revenue plunged 7.6% year over year to R$3,087.2 million
($1,497.6 million). Pay TV performed the worst with revenue
decline of 18.4%, followed by a 12.7% reduction in fixed voice
and access. On the other hand, interconnection revenue registered
an increase of 16.1%.
At the end of 2012, total fixed access lines reached 14.98
million, reflecting a 2.2% year-over-year decrease. Fixed
Broadband customers stood at 3.73 million compared with 3.63
million a year ago. The Pay TV subscriber base dropped
14.2% year over year to 600,000 customers, while subscriber base
at fixed voice segment was 10.65 million, down 3.1% year over
Telefonica Brasil - a subsidiary of
) - exited 2012 with cash and cash equivalents of R$7,196.1
million ($3,490.8 million) compared with R$2,940.3 million
($1,426.3 million) in the year-ago quarter. Net debt decreased to
R$439.9 million ($213.4 million) from R$3,165.4 million ($1,535.5
million) in 2011. Net debt-to-EBITDA ratio improved to 0.03 times
from 0.26 times in last year.
During 2012, the company incurred capital expenditure of
R$6,117.1 million ($2,967.4 million) as against R$5,741.2 million
($2,785.1 million) in 2011.
Telefonica Brasil currently holds a Zacks Rank #3 (Hold). We
believe that Telefonica Brasil displays long-term opportunities
for both fixed-line and mobile businesses, leading to better
revenue in the coming quarters. Broadening the subscriber base
along with investments in improving the network activity will
also aid in the company's profitability.
Other foreign companies that are expected to perform well in the
coming days are
Hawaiian Telcom Holdco Inc.
). Both the stocks hold Zacks Rank #2 (Buy).
FRANCE TELE-ADR (FTE): Free Stock Analysis
HAWAIIAN TELCOM (HCOM): Free Stock Analysis
TELEFONICA S.A. (TEF): Free Stock Analysis
TELEF BRASIL SA (VIV): Free Stock Analysis
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