The shares of Spain’s Telefonica rose on Thursday after the telecom company reported on-target results for the previous year. Indeed, Telefonica anticipated consistent revenue and profitability growth for 2023.
After a 4% increase in revenue this year, Telefonica said it anticipated overall revenue, including its British joint-venture and excluding currency swings and M&A effects, to rise at “a low single digit pace” in 2023.
In fact, after seeing 3% growth in 2022, its core earnings will probably increase at the same rate as revenue.
CEO José Maria Alvarez-Pallete stated in a statement that “the macroeconomic theories are a little better than we had a quarter ago concerning inflation and energy prices.”
Besides, he added that the company would reevaluate guidance at the halfway point, much as it had done in 2022 when it increased the projection, saying that “we are well positioned to continue on the road of profitable development.”
Nevertheless, mid-afternoon trading saw a 2% increase in Telefonica shares.
To reduce a previously devastating debt load and raise money for investments in cutting-edge technology like the deployment of a 5G network, the company has sold assets.
Furthermore, the company reported a net profit of 2.01 billion euros ($2.14 billion) in 2022, which was down 75% from 2021 when Telefonica reported capital gains on mobile tower sales and a tie-up between its O2 unit and Britain’s Virgin Media. Moreover, this was slightly higher than the 1.95 billion expected by analysts surveyed by Refinitiv.
In 2022, core earnings decreased by 42% to 12.85 billion euros, although organic growth increased by 3%, and overall revenue increased marginally to 39.99 billion euros from 39.28 billion.
In addition, with revenue of 10.2 billion euros, up from 9.67 billion euros a year earlier, the fourth quarter’s net profit came to 525 million euros.
Although operating results exceeded forecasts, net profit largely met consensus estimates, according to a note to investors from Capital Markets brokerage analysts.
However, the business kept its dividend per share at 0.30 euros.
