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Chunghwa Telecom (CHT) Q4 Earnings and Revenues Grow Y/Y

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Chunghwa Telecom Co. Ltd. (CHT - Free Report) announced impressive financial results in the fourth quarter of 2017. Quarterly total revenues were approximately $2,023 million, reflecting an increase of 10.3% year over year. Fourth-quarter net income came in at around $288 million, up 18.5% year over year.  Net earnings per American Depository Share (ADS) were 37 cents, increasing 19.4% from the year-ago quarter.

Operating income was approximately $347.4 million, up 5.1% year over year, while operating costs increased 5.2% to around $1,673.8 million. Operating margin increased marginally to 17.2% from 17.1% in the year-ago quarter.

The fourth quarter of 2017 EBITDA was $612.7 million, up 2% year over year. Quarterly EBITDA margin came in at 36.5%, down from 37.5% in the prior-year quarter. In the reported quarter, Chunghwa generated around $833.2 million of cash from operations, down 20.8% year over year. Cash and cash equivalents as of Dec 31, 2017 decreased 7.1% to about $959.4 million.

Segment-Wise Revenues

The Mobile Communications segment accounted for approximately $962.1 million of the total revenues in fourth-quarter 2017, up 2.1% year over year. The Internet segment contributed around $257.4 million, increasing 2.4%. The Domestic Fixed-line Communications segment registered $651.6 million in revenues, up 10.9%. The International Fixed-line Communications segment generated $117.9 million, down 0.3%. Other Business registered the remaining $34.2 million, down 1.3%.

Subscriber Statistics

As of Dec 31, 2017, total broadband subscriber base was more than 4.46541 million, of which FTTx subscriber base accounted for 79.5%, with around 3.55 million subscribers. Broadband subscribers signing up for 100 Mbps or higher speed connections were more than 1.28 million, up 9.5% year over year.  HiNet subscriber base totaled 3.73 million, down 0.7% year over year. Mobile subscriber base was 10.45 million, down 3.1% year over year. Mobile internet subscriber base was 7.35 million, increasing 7.2% year over year. 4G wireless subscribers base stands at 7.99 million. The International /Domestic Fixed-line subscriber base was 10.69 million.

Chunghwa Telecom Co., Ltd. Price, Consensus and EPS Surprise

 

Guidance

For 2018, Chunghwa expects total revenues to increase 1.7-2.4% year over year to NT$231.47-NT$232.97 billion. Operating costs are expected to increase 0.7-1.9% to NT$182.07-NT$184.24 billion. Income from operations is expected to be NT$47.17-NT$50.84 billion, up 0.9-8.8% year over year. Non-operating income is estimated at NT$0.94-NT$1.05 billion, reflecting a substantial 26.8-19.2% decline from 2017. Income before income tax and net income are expected to be NT$48.11-NT$51.89 billion (down 0.2-8.0%) and NT$37.25-NT$40.31 billion (down 4.1-3.7%), respectively. Earnings per share are expected to be NT$4.80-NT$5.20. EBITDA is projected at NT$ 79.11-NT$82.79 billion, up 0.6-5.3%. Capital expenditure is expected to rise a substantial 22.4% year over year to NT$33.06 billion.

Zacks Rank and Stocks to Consider

Chunghwa carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the same space are BT Group Plc. , Telecom Italia S.P.A and China Mobile Ltd. (CHL - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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