Bloomberg News

Portugal Telecom Third-Quarter Revenue Advances on Brazil

November 04, 2011

(Closes share price in last paragraph.)

Nov. 3 (Bloomberg) -- Portugal Telecom SGPS SA, Portugal’s biggest telecommunications company, reported an 83 percent gain in third-quarter revenue, boosted by Brazilian operations that helped offset a weak domestic market.

Sales rose to 1.75 billion euros ($2.4 billion), compared with the 1.76 billion-euro average estimate of analysts surveyed by Bloomberg. Earnings before interest, taxes, depreciation and amortization increased 71 percent to 654.2 million euros, the Lisbon-based company said in a statement today.

“Portugal Telecom continues to deliver remarkably good domestic results notwithstanding a terrible macroeconomic environment,” Robin Bienenstock, an analyst at Sanford C. Bernstein in London, said in a note today. “It is a shame, but no one is likely to care much about the company’s operations” while Europe struggles with the debt crisis.

Portugal Telecom bought a stake in Brazil’s largest fixed line operator, Telemar Norte Leste SA in March, and sold its stake in Vivo Participacoes SA last year for 7.5 billion euros to Spain’s Telefonica SA.

Telemar Norte Leste, also known as Oi, accounts for 46 percent of Portugal Telecom’s revenue and has helped counter a weak economy in Portugal, where the company’s third-quarter revenue fell 7.4 percent to 731 million euros.

Net income fell to 105.6 million euros from 5.35 billion euros a year earlier when Portugal Telecom had a one-time gain from the sale of the Vivo stake.

Portugal Telecom rose 4.7 percent to 5.169 euros in Lisbon. The stock has dropped 38 percent this year, valuing the company at about 4.6 billion euros.

--With assistance by Anabela Reis in Lisbon. Editors: Thomas Mulier, Robert Valpuesta

To contact the reporters on this story: Joao Lima in Lisbon at jlima1@bloomberg.net; Henrique Almeida in Lisbon at halmeida5@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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