(Bloomberg) — Telefonica SA reported profit that beat estimates, driven by strong performances in Brazil and Germany and by a slower profit decline from its Spanish home market. The carrier announced it will return to paying dividends fully in cash and will amortize treasury shares.
Underlying operating income before depreciation and amortization, a key profit metric that exclude exceptional items, was 3.2 billion euros ($3.6 billion) in the fourth quarter, down to 3.75 billion euros a year ago, the Madrid-based company said in a filing Thursday.
That beat the 2.6 billion-euro average forecast by eight analysts surveyed by Bloomberg.
Key Insights
- The Spanish company announced it will return to paying a dividend fully in cash after having switched to a so-called scrip dividend during the pandemic.
The carrier will also seek to amortize shares held by its treasury equal to about 2.4% of its total share capital. The dividend will continue to be 0.30 euros per share.
- In Spain, one of the most competitive telecom markets in Europe, Telefonica reduced the pace of its decline in profit, largely through cost cutting.
- Earnings where also bolstered by Brazil and Germany, two of its leading markets, and the so-called Hispam unit, which groups the Latin American-Spanish speaking countries and where several markets posted strong growth.
- The company said it expects low single-digit revenue and Oibda growth in 2022
Market Reaction
- Telefonica’s shares are up about 11% this year, outperforming an 2.4% increase in the broader Stoxx 600 Telecom index.
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