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Telefonica Brasil (VIV) Q2 Earnings Beat, Revenues Grow Y/Y
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Telefonica Brasil S.A. (VIV - Free Report) reported decent results for the second quarter of 2018, wherein both the top line and the bottom line improved on a year-over-year basis.
Net Income
Reported net income increased 262.7% year over year to R$3,166.3 million ($880.6 million). Pro forma net income for the reported quarter came in at R$3,152.9 million or R$1.75 per share ($876.8 million or 48 cents per share), up 261.2% year over year, primarily due to the increase in EBITDA (earnings before interest, taxes, depreciation and amortization) and non-recurring items in the quarter. The figure beat the Zacks Consensus Estimate of earnings of 23 cents.
Telefonica Brasil S.A. Price, Consensus and EPS Surprise
Quarterly pro forma net operating revenues increased 1.1% year over year to R$10,817.8 million ($3,008.5 million), maintaining the positive trajectory presented in the previous quarters.
Operating costs were R$5,634.7 million ($1,567 million), down 21.4% year over year. Recurring operating costs were R$7,085.4 million ($1,970.5 million), down 1.2% owing to the simplification, efficiency and digitization initiatives leading to cost reduction for more than two years.
Quarterly pro forma recurring EBITDA totaled R$3,732.4 million ($1,038 million), reflecting an increase of 5.8% year over year, with margin of 34.5%. This growth was due to the expansion of mobile and ultra-broadband revenues, in addition to the cost-efficiency measures adopted by the company in the period.
Segmental Performance
Pro forma net operating revenues from Mobile Business increased 4.2% year over year to R$6,810.1 million ($1,893.9 million). This growth was mainly due to the expansion of Data and Digital Services revenues (up 11.5% year over year), higher Net Handset revenues (up 60.5%), and the dissemination of unlimited voice plans in the sector that positively reflected in the Interconnection revenues.
As of Jun 30, 2018, the company’s total mobile subscriber base touched 75.3 million, up 1.2% year over year. Postpaid subscriber count increased 10.8% to 38.4 million, while prepaid customer count declined 7.1% to 36.8 million due to the company's ongoing strategy, focused on the migration of prepaid customers to hybrid plans and the restrictive policy of disconnection of inactive customers within the criteria established by ANATEL.
During the quarter, Mobile Business’ ARPU (average revenue per user) rose 0.5% year over year to R$28.3 ($7.9) due to improvement in the postpaid customer mix and the constant increase in data consumption, mainly in digital services. Data ARPU recorded a growth of 10% year over year.
Fixed Line Business’ pro forma net operating revenues declined 3.7% year over year to R$4,007.7 million ($1,114.6 million) due to lower voice revenues, cut in the fixed-to-mobile tariff and the reduction in the fixed interconnection tariff.
As of Jun 30, 2018, total fixed access lines were 22.5 million, reflecting a decline of 3.1% year over year, mainly affected by the performance of voice accesses due to the maturity of this service, and the strategic decision of deprioritizing growth in Pay TV with DTH technology.
Cash Flow and Liquidity
Recurring pro forma operating cash flow for the first six months of 2018 was R$3,811.5 million, down 2.2% year over year due to higher level of investments in this period.
For first-half 2018, Telefonica Brasil’s recurring free cash flow from business activity was R$3,002.6 million, up 13.9% year over year, reflecting an improvement in the operating result.
As on Jun 30, 2018 the company had cash and cash equivalents of R$4,429.8 million ($1,142 million) with long-term debt of R$4,968.7 million ($1,280.9 million).
Zacks Rank & Stocks to Consider
Telefonica Brasil currently has a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the broader industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Micron Technology, Inc. (MU - Free Report) and Swisscom AG (SCMWY - Free Report) . While Comtech and Micron sport a Zacks Rank #1 (Strong Buy), Swisscom carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average being 123.7%.
Micron has a long-term earnings growth expectation of 8.2%. It beat earnings estimates in each of the trailing four quarters, the average being 5.9%.
Swisscom has a long-term earnings growth expectation of 2.5%.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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Telefonica Brasil (VIV) Q2 Earnings Beat, Revenues Grow Y/Y
Telefonica Brasil S.A. (VIV - Free Report) reported decent results for the second quarter of 2018, wherein both the top line and the bottom line improved on a year-over-year basis.
Net Income
Reported net income increased 262.7% year over year to R$3,166.3 million ($880.6 million). Pro forma net income for the reported quarter came in at R$3,152.9 million or R$1.75 per share ($876.8 million or 48 cents per share), up 261.2% year over year, primarily due to the increase in EBITDA (earnings before interest, taxes, depreciation and amortization) and non-recurring items in the quarter. The figure beat the Zacks Consensus Estimate of earnings of 23 cents.
Telefonica Brasil S.A. Price, Consensus and EPS Surprise
Telefonica Brasil S.A. Price, Consensus and EPS Surprise | Telefonica Brasil S.A. Quote
Revenues
Quarterly pro forma net operating revenues increased 1.1% year over year to R$10,817.8 million ($3,008.5 million), maintaining the positive trajectory presented in the previous quarters.
Operating costs were R$5,634.7 million ($1,567 million), down 21.4% year over year. Recurring operating costs were R$7,085.4 million ($1,970.5 million), down 1.2% owing to the simplification, efficiency and digitization initiatives leading to cost reduction for more than two years.
Quarterly pro forma recurring EBITDA totaled R$3,732.4 million ($1,038 million), reflecting an increase of 5.8% year over year, with margin of 34.5%. This growth was due to the expansion of mobile and ultra-broadband revenues, in addition to the cost-efficiency measures adopted by the company in the period.
Segmental Performance
Pro forma net operating revenues from Mobile Business increased 4.2% year over year to R$6,810.1 million ($1,893.9 million). This growth was mainly due to the expansion of Data and Digital Services revenues (up 11.5% year over year), higher Net Handset revenues (up 60.5%), and the dissemination of unlimited voice plans in the sector that positively reflected in the Interconnection revenues.
As of Jun 30, 2018, the company’s total mobile subscriber base touched 75.3 million, up 1.2% year over year. Postpaid subscriber count increased 10.8% to 38.4 million, while prepaid customer count declined 7.1% to 36.8 million due to the company's ongoing strategy, focused on the migration of prepaid customers to hybrid plans and the restrictive policy of disconnection of inactive customers within the criteria established by ANATEL.
During the quarter, Mobile Business’ ARPU (average revenue per user) rose 0.5% year over year to R$28.3 ($7.9) due to improvement in the postpaid customer mix and the constant increase in data consumption, mainly in digital services. Data ARPU recorded a growth of 10% year over year.
Fixed Line Business’ pro forma net operating revenues declined 3.7% year over year to R$4,007.7 million ($1,114.6 million) due to lower voice revenues, cut in the fixed-to-mobile tariff and the reduction in the fixed interconnection tariff.
As of Jun 30, 2018, total fixed access lines were 22.5 million, reflecting a decline of 3.1% year over year, mainly affected by the performance of voice accesses due to the maturity of this service, and the strategic decision of deprioritizing growth in Pay TV with DTH technology.
Cash Flow and Liquidity
Recurring pro forma operating cash flow for the first six months of 2018 was R$3,811.5 million, down 2.2% year over year due to higher level of investments in this period.
For first-half 2018, Telefonica Brasil’s recurring free cash flow from business activity was R$3,002.6 million, up 13.9% year over year, reflecting an improvement in the operating result.
As on Jun 30, 2018 the company had cash and cash equivalents of R$4,429.8 million ($1,142 million) with long-term debt of R$4,968.7 million ($1,280.9 million).
Zacks Rank & Stocks to Consider
Telefonica Brasil currently has a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the broader industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Micron Technology, Inc. (MU - Free Report) and Swisscom AG (SCMWY - Free Report) . While Comtech and Micron sport a Zacks Rank #1 (Strong Buy), Swisscom carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average being 123.7%.
Micron has a long-term earnings growth expectation of 8.2%. It beat earnings estimates in each of the trailing four quarters, the average being 5.9%.
Swisscom has a long-term earnings growth expectation of 2.5%.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>
R$1 = $0.278103 (Period average from Apr 1, 2018 to Jun 30, 2018)
R$1 = $0.257798 (As on Jun 30, 2018)