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Telefonica's (TEF) Earnings and Revenues Grow Y/Y in Q1
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Spanish telecom giant, Telefonica S.A. (TEF - Free Report) reported strong financial results in the first quarter of 2017, wherein both top line and bottom line grew year over year.
Quarterly net income was €779 million (approximately $830 million) compared with a net income of €548 million (approximately $857 million) in the year-ago period. Moreover, first-quarter earnings per ADR (American Depository Receipt) came in at 19 cents, up an astonishing 216.7% year over year.
Telefonica recorded total revenue of €13,132 million (roughly $13,993 million) in the reported quarter, up 5% year over year.
Operating income before depreciation and amortization (OIBDA) came in at €4,021 million ($4,284.8 million), up 4.8% on a reported basis and also up 1.3% on an organic basis. Quarterly OIBDA margin was 30.6% compared with 30.5% in the year-ago quarter. Operating income was €1,570 million (around $1,673 million) in the reported quarter, up 3.6% year over year.
Segmental Detail
Telefonica Latin America: Revenues in Brazil increased 30.2% on a reported basis and 1.6% on an organic basis to €3,165 million ($3,372.6 million). Meanwhile in the Hispano-American markets, revenues grew 7.6% on a reported basis and 9.2% on an organic basis to €3,285 million ($3,500.5 million). OIBDA margin in Brazil and the Hispano-American markets was 34.9% and 27.5% in comparison with the year-ago figures of 33.1% and 28.3%, respectively. In Brazil, Telefonica operates through its subsidiary Telefonica Brasil SA (VIV - Free Report) .
Telefonica Europe: In Spain, revenues increased 5% on a reported basis and 1.5% on an organic basis to €3,066 million (approximately $3,267.1 million). OIBDA margin in Spain was 37.3% compared with 39.7% in the year-ago quarter. Revenues from Telefonica Deutschland were down 4.7% to €1,771 million ($1,887.2 million) on both reported and organic bases. OIBDA margin in Deutschland was 22.6% compared with 21.1% in the year-ago quarter. Revenues from Telefonica UK were down 8.6% on reported basis but up 2.1% on organic basis to €1,601 million ($1,706 million). OIBDA margin in the UK was 26% compared with 26.4% in the year-ago quarter.
Subscriber Statistics
As of Mar 31, 2017, total customer access lines were approximately 346.8728 million, down 0.1% 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 increased 0.8% to 274.0556 million customers. Total Internet and data access grew 0.7% to 21.6578 million users. Pay-TV access totaled 8.2193 million, down 1.7% year over year. LTE customer count was 75.4588 million, up an astounding 72% year over year, representing 29.1% of total mobile accesses. Fiber and VDSL access was 9.5806 million, up a substantial 20.8% year over year. Broadband access was 21.1196 million, up 0.5% year over year.
Liquidity and Cash Flow
Telefonica ended the first quarter of 2017 with cash and cash equivalents of €7,391 million (around $7,875.8 million) compared with €3,736 million (roughly $4,034.9 million) at 2016-end. The company exited the reported quarter with total debt of about €48,766 million (about $51,965 million) compared with €74,554 million ($80,518 million) recorded at the end of 2016.
In the first quarter of 2017, Telefonica generated €2,743 million (around $2,922.9 million) of cash from operations, up 24.3% year over year. Free cash flow in the reported period was €453 million (approximately $482.7 million) compared with a negative €72 million in the prior-year quarter.
Telefonica expects revenues to remain flat with the 2016 figure. OIBDA margin will expand 0.01% and capital expenditure will be around 16% of total revenue.
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Telefonica's (TEF) Earnings and Revenues Grow Y/Y in Q1
Spanish telecom giant, Telefonica S.A. (TEF - Free Report) reported strong financial results in the first quarter of 2017, wherein both top line and bottom line grew year over year.
Quarterly net income was €779 million (approximately $830 million) compared with a net income of €548 million (approximately $857 million) in the year-ago period. Moreover, first-quarter earnings per ADR (American Depository Receipt) came in at 19 cents, up an astonishing 216.7% year over year.
Telefonica recorded total revenue of €13,132 million (roughly $13,993 million) in the reported quarter, up 5% year over year.
Operating income before depreciation and amortization (OIBDA) came in at €4,021 million ($4,284.8 million), up 4.8% on a reported basis and also up 1.3% on an organic basis. Quarterly OIBDA margin was 30.6% compared with 30.5% in the year-ago quarter. Operating income was €1,570 million (around $1,673 million) in the reported quarter, up 3.6% year over year.
Segmental Detail
Telefonica Latin America: Revenues in Brazil increased 30.2% on a reported basis and 1.6% on an organic basis to €3,165 million ($3,372.6 million). Meanwhile in the Hispano-American markets, revenues grew 7.6% on a reported basis and 9.2% on an organic basis to €3,285 million ($3,500.5 million). OIBDA margin in Brazil and the Hispano-American markets was 34.9% and 27.5% in comparison with the year-ago figures of 33.1% and 28.3%, respectively. In Brazil, Telefonica operates through its subsidiary Telefonica Brasil SA (VIV - Free Report) .
Telefonica Europe: In Spain, revenues increased 5% on a reported basis and 1.5% on an organic basis to €3,066 million (approximately $3,267.1 million). OIBDA margin in Spain was 37.3% compared with 39.7% in the year-ago quarter. Revenues from Telefonica Deutschland were down 4.7% to €1,771 million ($1,887.2 million) on both reported and organic bases. OIBDA margin in Deutschland was 22.6% compared with 21.1% in the year-ago quarter. Revenues from Telefonica UK were down 8.6% on reported basis but up 2.1% on organic basis to €1,601 million ($1,706 million). OIBDA margin in the UK was 26% compared with 26.4% in the year-ago quarter.
Subscriber Statistics
As of Mar 31, 2017, total customer access lines were approximately 346.8728 million, down 0.1% 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 increased 0.8% to 274.0556 million customers. Total Internet and data access grew 0.7% to 21.6578 million users. Pay-TV access totaled 8.2193 million, down 1.7% year over year. LTE customer count was 75.4588 million, up an astounding 72% year over year, representing 29.1% of total mobile accesses. Fiber and VDSL access was 9.5806 million, up a substantial 20.8% year over year. Broadband access was 21.1196 million, up 0.5% year over year.
Liquidity and Cash Flow
Telefonica ended the first quarter of 2017 with cash and cash equivalents of €7,391 million (around $7,875.8 million) compared with €3,736 million (roughly $4,034.9 million) at 2016-end. The company exited the reported quarter with total debt of about €48,766 million (about $51,965 million) compared with €74,554 million ($80,518 million) recorded at the end of 2016.
In the first quarter of 2017, Telefonica generated €2,743 million (around $2,922.9 million) of cash from operations, up 24.3% year over year. Free cash flow in the reported period was €453 million (approximately $482.7 million) compared with a negative €72 million in the prior-year quarter.
Telefonica SA Price, Consensus and EPS Surprise
Telefonica SA Price, Consensus and EPS Surprise | Telefonica SA Quote
Outlook for 2017
Telefonica expects revenues to remain flat with the 2016 figure. OIBDA margin will expand 0.01% and capital expenditure will be around 16% of total revenue.
Telefonica currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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