Telefonica profit up 16 pct in Q2

MADRID

Spanish telecommunications company Telefonica said Thursday that second-quarter profit rose 16 percent on strong revenue increases in Europe and Latin America, where it has just bought a controlling stake in Brazil's largest cell phone operator.

Telefonica said net profit for the April-June period was euro2.12 billion ($2.75 billion), up from euro1.83 billion for the same period in 2009. For the half-year, net profit increased 9.4 percent to euro3.37 billion.

Sales for the second quarter rose 9 percent to euro15.12 billion. In Spain, sales dropped 3.2 percent but were offset by a 14 percent increase in Europe and a 16 percent gain in Latin American.

Operating income before depreciation and amortization rose 4 percent to euro5.79 billion.

The results Thursday came a day after the company took control of Brazil's Vivo in a euro7.5 billion ($9.77 billion) deal with Portugal Telecom.

Telefonica is eager to expand its significant presence in the fast-growing Latin American sector, where it has an important foothold in burgeoning markets such as Chile, Colombia, Mexico, Peru, Venezuela and Brazil.

Brazil's economy is booming, in contrast to Telefonica's home territory of Spain which is struggling to emerge from nearly two years of recession.

Telefonica shares in Madrid were up 3.32 percent at euro17.6 ($22.9).