Deutsche Telekom Swings to Profit
FRANKFURT--Deutsche Telekom AG (DTE.XE) said Thursday it swung to a net profit in the fourth quarter, after charges
had hurt its earnings a year earlier, and confirmed its full-year guidance for 2013.
Net profit was 793 million euros ($1.04 billion) in the fourth quarter, up from a EUR1.34 billion loss a year earlier
when the German company booked a EUR2.3 billion impairment charge on its U.S. unit T-Mobile USA.
Total revenue declined 1.4% to EUR14.71 billion, with the company citing ongoing competitive and price pressures.
Telekom's sales have been falling for three years now due to its U.S. cellular operator's lack of scale and
competitive pressure on its German fixed-line business, where rival cable operators with fiber optic networks offer much
higher Internet speeds than those provided by Telekom's decades-old copper cables.
The group's U.S. business with T-Mobile USA, the fourth-largest mobile telecommunications provider in the country,
contributed EUR3.79 billion in fourth-quarter revenue compared with EUR3.85 billion a year earlier, but it had 200,000
more customers at year-end than at the end of 2011.
Deutsche Telekom announced in October it will combine T-Mobile USA with MetroPCS Communications Inc. (PCS), the
country's fifth largest wireless carrier. The deal is structured as a reverse merger, meaning T-Mobile will merge into
the already-public structure of MetroPCS, with Deutsche Telekom holding a 76% stake in the merged company.
Deutsche Telekom said in December it wants to cut the dividend for 2013 and 2014 to EUR0.50 from EUR0.70 per share in
order to spend EUR6 billion on upgrading the German fixed-line network, investments which are also expected to weigh on
The management on Thursday confirmed its guidance of reaching adjusted earnings before interest, tax, depreciation and
amortization of EUR17.4 billion this year excluding MetroPCS, down from EUR17.98 billion in 2012.
Write to Friedrich Geiger at email@example.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2013 Dow Jones & Company, Inc.