Telefónica Q4 Profit Surges, Sees Revenue Growth In 2014

(RTTNews) - Spanish telecom group Telefónica S.A. (TEF, TDE.L) Thursday reported a sharp increase in fourth-quarter profit, reflecting the firm's cost cutting measures. Quarterly revenues fell 8.9 percent, but was up 1.8 percent in organic terms. Looking ahead to full year 2014, the company anticipates a positive revenue growth.

César Alierta, executive chairman said, "In 2014 Telefónica will double the fibre coverage in Spain to 7.1 million homes passed, reaching the highest coverage levels among the largest economies in Europe."

The company said it continues leading the mobile data market in Latin America with the progressive launch of 4G.

For the fourth quarter, the firm posted net income of 1.45 billion euros, significantly up from 473 million euros in the previous year. Basic earnings per share were 0.31 euros, compared to 0.11 euros per share reported last year. However, on an underlying terms, net profit dropped 7.1 percent and basic earnings per share were down 9.9 percent from last year.

On a reported basis, operating income edged down 0.9 percent to 2.77 billion euros from 2.79 billion euros a year ago.

Quarterly revenues fell 8.9 percent to 14.44 billion euros from 15.84 billion euros in the preceding year. Revenues from Telefónica Latinoamérica declined 6.7 percent, and Telefónica Europe reported a 10 percent fall in revenues.

Operating expenses declined 8 percent to 9.82 billion euros.

Telefónica said it managed a total of 323.1 million accesses at the end of 2013, up 2 percent from last year, driven by contract mobile customers, in particular the mobile broadband segment, and pay TV accesses. Mobile accesses stood at 254.7 million at the end of December.

According to the firm, T. Latinoamérica, which comprises 68 percent of the total, showed outstanding access performance.

Mobile broadband accesses were 72.8 million at the end of 2013, up 38 percent year-on-year. Retail broadband accesses totaled 18.4 million, up 2 percent compared with December 2012. Pay TV accesses increased 8 percent from last year, with 266 thousand net additions in 2013.

For full year 2014, the company anticipates a positive revenue growth, assuming constant exchange rates as of 2013 and excluding Venezuela.

In addition, the firm reaffirmed its commitment to pay shareholders, with the distribution in 2014 of a dividend of 0.75 euros per share to be paid in the fourth quarter of 2014. In Madrid, Telefónica shares are currently trading at 11.28 euros, down 1.74 percent, on a volume of 7.25 million shares.