Spanish telecom giant, Telefonica S.A. ( TEF ) reported
first-quarter 2013 results, with earnings of 20 Euro cents per
share (26 cents per ADS) that rose 22.2% year over year.
The company recorded revenues of €14,141 million ($20,541
million) in the first quarter that dropped 8.8% year over year on a
reported basis and 1.6% on an organic basis.
In the first quarter, adjusted operating income, before
depreciation and amortization (OIBDA), fell 0.1% to €4,567 million
($6,032), resulting in an adjusted OIBDA margin of 32.3%, down 50
basis points year over year.
Telefonica Latin America : Revenues
increased 3.8% year over year to €7,232 million ($39.2 billion) in
the first quarter, driven largely by Peru (9.7%), Uruguay (5.8%),
Ecuador (5%), Argentina (5%), Central America (3%), Chile (0.7%).
However, revenues from Brazil, Venezuela Columbia and Mexico
registered a decline of 9.5%, 6.1%, 3.0%, and 0.6%, respectively in
the first quarter.
Telefonica Europe : Revenues from
Europe slid 11.7% year over year to €6,675 million ($8,815.6
million). The reported downside was owing to the operator's Spanish
revenues that slipped 16.4% year over year to €3,260 million
In Spain, Wireless revenues fell 24.7% to €1,286 million
($1,698.4 million) resulting from a reduction in MTRs. Hurt by weak
traffic revenues and repositioning of the new tariff portfolio,
Wireline revenues stood at €2,220 million ($2,931.9 million), down
10.9% from the year-ago period.
In the reported period, revenues from the Ireland and Czech
Republic declined 12.1% and 6.2% year over year to €136 million
($179.6 million) and €466 million ($615.4 million), respectively.
Revenues from Germany and U.K. showed a 2.3% and 6.6% decrease to
reach €1,230 billion ($1,624 million) and €1,605 million ($2,119
At the end of the first quarter, total customer access reached
approximately 309 million, up 1.9% year over year.
On an year over year basis, mobile access rose 2.6% to 247.3
million customers. The total Internet and data access grew 0.6% to
19.4 million. Pay-TV access reached 3.30 million, down 0.6% year
over year. Fixed telephony access dropped 1.3% to 39.8 million
subscribers at the end of the reported period.
Liquidity and Capital Expenditure (CapEx)
Telefonica exited the quarter with a net debt of about €51.81
billion ($68.43 billion), up from €51.25 billion ($65.90 billion)
recorded at the end of 2012. The leverage ratio (net
debt-to-EBITDA) stood at 2.41 times compared with 2.36 times in
CapEx was down 21.1% year over year to €626 million ($827
million) in the reported period. Operating cash flow (OIBDA-CapEx)
was €1.679 ($2.217) million in the reported period, up 23.1% year
Telefonica continues to remain under pressure due to
intensifying European woes, weak domestic operations, slowdown in
Brazil operations, adverse regulations, a highly leveraged balance
sheet and growing competition from France Telecom
S.A. ( FTE
), Vodafone Group Plc ( VOD ) and
America Movil S.A.B. de C.V. ( AMX ).
Telefonica currently has a Zacks Rank #3 (Hold).AMER MOVIL-ADR (AMX): Free Stock Analysis
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