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  1. Deutsche Telekom Q2 profits beat forecasts, U.S. in spotlight

Deutsche Telekom Q2 profits beat forecasts, U.S. in spotlight

Deutsche Telekom, Europe's biggest telecom company, on Thursday posted quarterly results that topped expectations.

By: | Frankfurt | Published: August 3, 2017 1:55 PM
Deutsche Telekom, T-mobile, EBITDA,T-systems Q2 core profit rose 9 pct to 5.94 bln v 5.76 bln consensus (Reuters)

Deutsche Telekom, Europe’s biggest telecom company, on Thursday posted quarterly results that topped expectations, with a 9 percent rise in core profit powered by strong results in the United States and modest gains in Germany and Europe. The German company slightly nudged up its 2017 outlook for core profit to around 22.3 billion euros ($26.4 billion)from 22.2 billion previously. The second quarter results were largely driven by the contribution from its T-Mobile US business, 64-percent controlled by Deutsche Telekom and which last month said it added more than a million customers for the 17th quarter in a row. T-Mobile, the No. 3 U.S. mobile operator, is one of two public suitors seeking a tie-up with No. 4-ranked Sprint Corp .
Overall at Deutsche Telekom, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), excluding special items, rose 8.9 percent to 5.94 billion euros, beating forecasts, which ranged from 5.63 billion to 5.89 billion euros in a Reuters poll. Revenue rose by 6.0 percent to 18.89 billion euros, topping the high end of forecasts by 10 analysts polled by Reuters. Telekom said it invested 3 billion euros in capital spending, a 12.4 percent increase, leading quarterly free cash flow to dip 1.4 percent to 1.3 billion euros. For the full year, it reaffirmed its annual free cash flow target of 5.5 billion. During the second quarter, the United States business contributed half of Telekom group revenue and 44 percent of core profit, while Germany contributed one-third of reported profits and other business roughly one-fifth. T-Systems, its technical and communications consulting business, posted a 1.8 pct decline in second-quarter revenue amid sustained industry pricing pressure, Telekom said. Orders in the second quarter dropped 13.4 percent to 1.3 billion euros.

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