Deutsche Telekom Q4 net profit hits $1 billion
- Associated Press
- February 28, 2013 - 4:43 AM
FRANKFURT, Germany - Deutsche Telekom saw net profit recover to (EURO)793 million ($1.04 billion) in the fourth quarter as the telecoms group declared it was "on the offensive" with new investments in higher-speed networks.
Despite the improved net profit, against a loss of (EURO)1.34 billion last year, global sales declined 1.4 percent to (EURO)14.71 billion — and sagged 4.1 percent in the U.S. market, where the company is trying to turn around its business with the help of a merger with mobile provider MetroPCS Communications.
Deutsche Telekom's U.S. business has struggled because it lacks the scale and efficiencies of larger competitors. An attempt to sell the division to AT&T was blocked by anti-trust authorities. Meanwhile its traditional German landline business has seen customers leave for competitors or to go mobile-only.
Excluding one-time effects and financial items, fourth-quarter earnings decreased 13 percent to (EURO)4.03 billion.
For the full year, the Bonn-based company lost (EURO)5.25 billion ($6.88 billion) due to a (EURO)7.4 billion writedown on the merger of its T-Mobile USA division with MetroPCS. The loss compared to a net profit of (EURO)557 million in 2011. The company said it would keep its dividend at (EURO)0.70.
The company reported some successes such as the increase in demand for smartphones in its large home market, Germany, and the first rise in customers at its US business since 2009. But overall revenues declined 0.8 percent to (EURO)58.17 billion.
Deutsche Telekom shares rose 0.7 percent to (EURO)8.18 in morning trading in Europe.
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