Deutsche Telekom reports profit rise

November 4, 2010

, FRANKFURT, Nov 4 – German telecommunications operator Deutsche Telekom reported a 7.9-percent rise in quarterly net profit on Thursday and stood by its underlying operating profit target for 2010.

The group said net profit rose to 1.035 billion euros (1.46 billion dollars) in the third quarter and that it would make an adjusted core operating profit of 20 billion euros for the year as a whole.

But sales fell by 4.1 percent on a 12-month comparison to 15.6 billion euros after the results from the British mobile telecoms unit were stripped out. This was because that business had been merged with one owned by France Telecom.

The results were in line or slightly better than expected by analysts.

Those polled by Dow Jones Newswires forecast a quarterly profit of 913 million euros and 15.57 billion euros in sales.

Deutsche Telekom\’s adjusted core earnings before interest, tax, depreciation and amortisation (Ebitda), which the company uses in forecasts, fell by 9.02 percent to 5.02 billion euros.

That was also a result of the economic environment in southeastern Europe, where the operator is strongly active and high marketing costs in the United States, a statement said.

Deutsche Telekom nonetheless reaffirmed its full year adjusted Ebitda target of 20 billion euros and available cash flow position of at least 6.2 billion euros.

The group\’s US mobile telephone unit posted strong results despite stiff competition, while domestic sales were boosted by the growing number of smart phones which incite users to use more telecoms services.

Shares in the company fell by 1.53 percent to 10.29 euros in early trading on the Frankfurt stock exchange, while the DAX index of leading stocks was 0.89 percent higher overall.

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