Bloomberg News

TeliaSonera Profit Misses Estimates as Fixed Line Sales Fall

February 02, 2012

(Updates with analyst comment in fourth paragraph.)

Feb. 2 (Bloomberg) -- TeliaSonera AB reported profit that missed estimates for a fourth consecutive quarter as Nordic- region customers continued to shut off their fixed phone lines.

Fourth-quarter net income fell to 4.97 billion kronor ($738 million) from 5.31 billion kronor a year earlier, Stockholm- based TeliaSonera said in a statement today. Revenue rose 1 percent to 27.1 billion kronor, in line with estimates, and TeliaSonera proposed a dividend of 2.85 kronor per share.

TeliaSonera is counting on higher-priced Nordic mobile broadband services and growth of Eurasia subscribers to make up for the decline in traditional telephone use. Investment in faster 4G networks, which current smartphones aren’t equipped for, and poor exchange rates for revenue in Russian rubles and Turkish lira trimmed profits. The company forecast that sales in local currencies, excluding acquisitions, will grow 1 percent to 2 percent this year, with an unchanged margin based on earnings before interest, taxes, depreciation and amortization.

“The outlook is somewhat disappointing,” said Andrew Hogley, a London-based analyst at Espirito Santo. “The proposed dividend of 2.85 kronor is below our forecast of 3 kronor and there’s no mention of any further share buybacks which we’re also viewing as disappointing.”

Share Performance

TeliaSonera fell as much as 1.8 percent in Stockholm trading and was down 1.2 percent at 45.60 kronor as of 9:38 a.m.

Analysts had expected profit of 5.2 billion kronor on sales of 27 billion kronor, according to estimates compiled by Bloomberg. TeliaSonera reported full-year sales growth of 2.6 percent in local currencies, compared with a forecast of “around 3 percent.” Revenue declined 2.5 percent when converted to kronor.

“In Sweden our 4G services now cover 200 locations and will expand by one city or village every day during 2012,” Chief Executive Officer Lars Nyberg said in the statement. “We will continue to look for new opportunities within or neighboring our existing footprint.”

Capital investments including licenses and fees increased to 16.5 percent of sales for the year, up from 14 percent in 2010.

The company is increasing effective ownership in its Kazakhstan unit to 61.9 percent, it said in a separate statement.

--Editors: Tom Lavell, David Risser

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

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


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