Telefónica report decline in Q1 2012 results

11 May 2012 | Kavit Majithia


Telefónica reported a significant decline in profit within its Q1 profit as the company’s domestic business again came under fire.

Net income fell by 53.9%, compared with the same period in 2011, to €748 million, down from €1.62 billion. The results came in well below analyst forecasts, with the Financial Times reporting earnings before interest, tax, depreciation and amortisation fell to €5 billion, 4.3% below a consensus conducted by Citi Group.

The company’s Latin America operations provided some light for the company, which accounted for 48% of total consolidated revenue, increasing by 8.3% to €7.5 billion. The company said this was largely due to growing mobile revenues, with data revenues increasing by 28.8% in the region.

There are continuing concerns that Telefónica’s domestic business is not able to beat its downward curve, with mobile service revenues in Spain also dropping by 17.8% - data revenue also decreased. It’s UK operation O2 also saw a 33% drop in operating income, and revenues further fell by 6% to €1.72 billion.

The company’s chairman Cesar Alierta said revenue growth was a priority for Telefónica in 2012 and earnings were “in line with internal estimates”.