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Telefonica (TEF) Earnings Down Y/Y, Revenues Miss in Q2
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Spanish telecom giant Telefonica S.A. (TEF - Free Report) reported weak financial results in the second quarter of 2016.
Quarterly net income decreased a substantial 54.5% year over year to €693 million (approximately $783 million). Moreover, second-quarter earnings per ADR (American Depository Receipt) came in at 15 cents, down 48.3% year over year.
Telefonica recorded total revenue of €12,723 million (roughly $14,369 million) in the second quarter, down 7.7% year over year and short of the Zacks Consensus Estimate of $14,459 million.
Operating income before depreciation and amortization (OIBDA) came in at €3,918 million ($4,423.4 million), down 7.1% on a reported basis and 0.8% on an organic basis. However, quarterly OIBDA margin was 30.8% compared with 30.6% in the year-ago quarter. Operating income declined 12% on a reported basis and 1.5% on an organic basis to €1,567 million ($1,769.1 million).
Segmental Detail
Telefonica Latin America: Revenues in Brazil decreased 9.8% on a reported basis but increased 0.9% on an organic basis to €2,656 million ($2,998.6 million), while in the Hispano-American markets, revenues fell 14.6% on a reported basis but improved 3.6% on an organic basis to €2,961 million ($3,343 million). OIBDA margin in Brazil and the Hispano-American markets was 31.7% and 28.2% in comparison to the year-ago figures of 30.1% and 30.7%, respectively. In Brazil, Telefonica operates through its subsidiary Telefonica Brasil SA (VIV - Free Report) .
Telefonica Europe: In Spain, revenues increased 7.7% on a reported basis but declined 0.1% on an organic basis to €3,202 million (approximately $3,615.1 million). OIBDA margin in Spain was 41.1% compared with 44.5% in the year-ago quarter. Revenues from Telefonica Deutschland were down 5.9% on both a reported and organic basis to €1,834 million ($2,070.5 million).
As of Jun 30, 2016, total customer access lines were approximately 341.9223 million, down 1.8% year over year. Notably, in the Latin American markets, Telefonica competes with large global telecom operators like AT&T, Inc. (T - Free Report) and America Movil S.A.B. de C.V. (AMX - Free Report) .
On a year-over-year basis, mobile access decreased 2.1% to 272.5963 million customers. Total Internet and data access grew 1.8% to 21.6414 million users. Pay-TV access totaled 8.422 million, up 4.9% year over year. LTE customer count was 50.0773 million, up an astounding 105.7% year over year, representing 19.3% of total mobile accesses. Fiber and VDSL access was 8.362 million, up a substantial 30.9% year over year. Broadband access was 21.1959 million, up 2% year over year.
Liquidity and Cash Flow
Telefonica exited the second quarter of 2016 with total debt of about €63,712 million (about $71,931 million), up from €49,921 million ($54,663.5 million) recorded at the end of 2015. Telefonica ended the reported quarter with cash and cash equivalents of €2884 million (around $3,256 million) compared with €5,570 million (around $6,099.2 million) at 2015 end.
In the first half of 2016, Telefonica generated €6,996 million (around $7,898.5 million) of cash from operations, down 4.8% year over year. Free cash flow in the reported period was €747 million (approximately $843.4 million).
Telefonica currently carries a Zacks Rank #3 (Hold).
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Telefonica (TEF) Earnings Down Y/Y, Revenues Miss in Q2
Spanish telecom giant Telefonica S.A. (TEF - Free Report) reported weak financial results in the second quarter of 2016.
Quarterly net income decreased a substantial 54.5% year over year to €693 million (approximately $783 million). Moreover, second-quarter earnings per ADR (American Depository Receipt) came in at 15 cents, down 48.3% year over year.
Telefonica recorded total revenue of €12,723 million (roughly $14,369 million) in the second quarter, down 7.7% year over year and short of the Zacks Consensus Estimate of $14,459 million.
Operating income before depreciation and amortization (OIBDA) came in at €3,918 million ($4,423.4 million), down 7.1% on a reported basis and 0.8% on an organic basis. However, quarterly OIBDA margin was 30.8% compared with 30.6% in the year-ago quarter. Operating income declined 12% on a reported basis and 1.5% on an organic basis to €1,567 million ($1,769.1 million).
Segmental Detail
Telefonica Latin America: Revenues in Brazil decreased 9.8% on a reported basis but increased 0.9% on an organic basis to €2,656 million ($2,998.6 million), while in the Hispano-American markets, revenues fell 14.6% on a reported basis but improved 3.6% on an organic basis to €2,961 million ($3,343 million). OIBDA margin in Brazil and the Hispano-American markets was 31.7% and 28.2% in comparison to the year-ago figures of 30.1% and 30.7%, respectively. In Brazil, Telefonica operates through its subsidiary Telefonica Brasil SA (VIV - Free Report) .
Telefonica Europe: In Spain, revenues increased 7.7% on a reported basis but declined 0.1% on an organic basis to €3,202 million (approximately $3,615.1 million). OIBDA margin in Spain was 41.1% compared with 44.5% in the year-ago quarter. Revenues from Telefonica Deutschland were down 5.9% on both a reported and organic basis to €1,834 million ($2,070.5 million).
TELEFONICA S.A. Price, Consensus and EPS Surprise
TELEFONICA S.A. Price, Consensus and EPS Surprise | TELEFONICA S.A. Quote
Subscriber Statistics
As of Jun 30, 2016, total customer access lines were approximately 341.9223 million, down 1.8% year over year. Notably, in the Latin American markets, Telefonica competes with large global telecom operators like AT&T, Inc. (T - Free Report) and America Movil S.A.B. de C.V. (AMX - Free Report) .
On a year-over-year basis, mobile access decreased 2.1% to 272.5963 million customers. Total Internet and data access grew 1.8% to 21.6414 million users. Pay-TV access totaled 8.422 million, up 4.9% year over year. LTE customer count was 50.0773 million, up an astounding 105.7% year over year, representing 19.3% of total mobile accesses. Fiber and VDSL access was 8.362 million, up a substantial 30.9% year over year. Broadband access was 21.1959 million, up 2% year over year.
Liquidity and Cash Flow
Telefonica exited the second quarter of 2016 with total debt of about €63,712 million (about $71,931 million), up from €49,921 million ($54,663.5 million) recorded at the end of 2015. Telefonica ended the reported quarter with cash and cash equivalents of €2884 million (around $3,256 million) compared with €5,570 million (around $6,099.2 million) at 2015 end.
In the first half of 2016, Telefonica generated €6,996 million (around $7,898.5 million) of cash from operations, down 4.8% year over year. Free cash flow in the reported period was €747 million (approximately $843.4 million).
Telefonica currently carries a Zacks Rank #3 (Hold).
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