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Telefonica, S.A. (TEF - Free Report) reported a third-quarter 2023 net income of €502 million compared with €460 million in the year-ago quarter. Furthermore, basic earnings per share (EPS) were €0.09 compared with €0.02 in the year-ago quarter.
Quarterly total revenues decreased 0.2% year over year to €10,321 million. Organic revenues (aggregating 50% of Virgin Media O2 joint venture results) grew 2.5% year over year to €11,885 million.
Telefonica Espana: Quarterly revenues in Spain increased 1% year over year on a reported basis to €3,151 million. This is due to momentum in service revenues owing to strong retail revenues, partly offset by tariff repositioning and lower IT sales. The quarterly OIBDA margin was 36.3%. Capital expenditure (CapEx) on a reported basis decreased 1.5% to €396 million in the quarter.
Telefonica Deutschland: Quarterly revenues rose 2.2% to €2,131 million. The improvement was driven by continued momentum in the mobile business, partly offset by the accelerated MTR glidepath. The quarterly OIBDA margin was 31.6%. CapEx declined 9.7% to €312 million in the quarter.
VirginMedia-O2 U.K.: Quarterly revenues of this newly formed segment increased 6.7% to €3,220 million due to a rise in mobile revenues, partly offset by a decline in fixed revenues. The quarterly OIBDA margin stood at 35.1%. CapEx decreased 7.7% to €662 million in the quarter.
Telefonica Brasil: Quarterly revenues in Brazil grew 6.8% to €2,467 million, mainly due to the momentum in mobile revenues and the progressive update on tariffs. The quarterly OIBDA margin was 44.4%. CapEx increased 8.3% to €529 million in the quarter.
Telefonica Infra (Telxius): In the third quarter, Telxius announced that it will extend the deployment of Tikal (by Telxius), a new ultrahigh capacity subsea cable to Cancun (Mexico). It is expected to become operational by the third quarter of 2026.
Telefonica Tech: Revenues increased 14.4% year over year to €442 million owing to solid momentum across Cybersecurity and IoT business segments. Quarterly revenues in the Telefonica Hispam segment decreased 10.8% to €2,238 million, mainly due to lower handset sales. The quarterly OIBDA margin was 17.9%. CapEx has decreased 17% to €191 million in the quarter.
Other Details
Quarterly OIBDA was €3,330 million, up 2.5% year over year. Operating income was €1,057 million in the quarter under review compared with €914 million in the prior-year quarter.
Cash Flow & Liquidity
For the nine months that ended Sep 30, 2023, Telefonica generated €8,238 million of net cash from operating activities compared with €7,598 million generated in the comparable period in the prior year. The free cash flow for the same period totaled €1,130 million, which includes principal payments of leases.
As of Sep 30, 2023, the company had €7,819 million in cash and cash equivalents, with €34,239 million of non-current financial liabilities.
2023 Outlook
The company expects revenues to grow by approximately 4% compared with the previous guidance of low-single-digit growth. OIBDA is expected to grow by approximately 3% compared with the previous guidance of low-single-digit growth. CapEx-to-sales ratio is unchanged at 14%.
In addition, the company announced a cash dividend of €0.30 per share, payable on December 2023 (€0.15 per share) and June 2024 (€0.15 per share).
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 676.4%. Shares of ASUR have soared 24.5% in the past year.
The Zacks Consensus Estimate for Flex’s 2024 EPS has gained 3.6% in the past 60 days to $2.56. Flex’s long-term earnings growth rate is 12.4%. Shares of FLEX have gained 35.4% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has improved 7.3% in the past 60 days to $3.07.
Badger Meter’s earnings outpaced the Zacks Consensus Estimate in all the last four quarters, the average surprise being 10.3%. Shares of BMI have rallied 30.9% in the past year.
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Telefonica's (TEF) Q3 Earnings Rise Y/Y, Revenues Dip Slightly
Telefonica, S.A. (TEF - Free Report) reported a third-quarter 2023 net income of €502 million compared with €460 million in the year-ago quarter. Furthermore, basic earnings per share (EPS) were €0.09 compared with €0.02 in the year-ago quarter.
Quarterly total revenues decreased 0.2% year over year to €10,321 million. Organic revenues (aggregating 50% of Virgin Media O2 joint venture results) grew 2.5% year over year to €11,885 million.
Telefonica SA Price, Consensus and EPS Surprise
Telefonica SA price-consensus-eps-surprise-chart | Telefonica SA Quote
Results by Business Units
Telefonica Espana: Quarterly revenues in Spain increased 1% year over year on a reported basis to €3,151 million. This is due to momentum in service revenues owing to strong retail revenues, partly offset by tariff repositioning and lower IT sales. The quarterly OIBDA margin was 36.3%. Capital expenditure (CapEx) on a reported basis decreased 1.5% to €396 million in the quarter.
Telefonica Deutschland: Quarterly revenues rose 2.2% to €2,131 million. The improvement was driven by continued momentum in the mobile business, partly offset by the accelerated MTR glidepath. The quarterly OIBDA margin was 31.6%. CapEx declined 9.7% to €312 million in the quarter.
VirginMedia-O2 U.K.: Quarterly revenues of this newly formed segment increased 6.7% to €3,220 million due to a rise in mobile revenues, partly offset by a decline in fixed revenues. The quarterly OIBDA margin stood at 35.1%. CapEx decreased 7.7% to €662 million in the quarter.
Telefonica Brasil: Quarterly revenues in Brazil grew 6.8% to €2,467 million, mainly due to the momentum in mobile revenues and the progressive update on tariffs. The quarterly OIBDA margin was 44.4%. CapEx increased 8.3% to €529 million in the quarter.
Telefonica Infra (Telxius): In the third quarter, Telxius announced that it will extend the deployment of Tikal (by Telxius), a new ultrahigh capacity subsea cable to Cancun (Mexico). It is expected to become operational by the third quarter of 2026.
Telefonica Tech: Revenues increased 14.4% year over year to €442 million owing to solid momentum across Cybersecurity and IoT business segments.
Quarterly revenues in the Telefonica Hispam segment decreased 10.8% to €2,238 million, mainly due to lower handset sales. The quarterly OIBDA margin was 17.9%. CapEx has decreased 17% to €191 million in the quarter.
Other Details
Quarterly OIBDA was €3,330 million, up 2.5% year over year. Operating income was €1,057 million in the quarter under review compared with €914 million in the prior-year quarter.
Cash Flow & Liquidity
For the nine months that ended Sep 30, 2023, Telefonica generated €8,238 million of net cash from operating activities compared with €7,598 million generated in the comparable period in the prior year. The free cash flow for the same period totaled €1,130 million, which includes principal payments of leases.
As of Sep 30, 2023, the company had €7,819 million in cash and cash equivalents, with €34,239 million of non-current financial liabilities.
2023 Outlook
The company expects revenues to grow by approximately 4% compared with the previous guidance of low-single-digit growth. OIBDA is expected to grow by approximately 3% compared with the previous guidance of low-single-digit growth. CapEx-to-sales ratio is unchanged at 14%.
In addition, the company announced a cash dividend of €0.30 per share, payable on December 2023 (€0.15 per share) and June 2024 (€0.15 per share).
Zacks Rank & Stocks to Consider
Telefonica currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Asure Software (ASUR - Free Report) , Flex (FLEX - Free Report) and Badger Meter (BMI - Free Report) . Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 676.4%. Shares of ASUR have soared 24.5% in the past year.
The Zacks Consensus Estimate for Flex’s 2024 EPS has gained 3.6% in the past 60 days to $2.56. Flex’s long-term earnings growth rate is 12.4%. Shares of FLEX have gained 35.4% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has improved 7.3% in the past 60 days to $3.07.
Badger Meter’s earnings outpaced the Zacks Consensus Estimate in all the last four quarters, the average surprise being 10.3%. Shares of BMI have rallied 30.9% in the past year.