UPDATE: Swisscom Reiterates Targets Despite Profit, Sales Fall
August 04 2010 - 2:33AM
Dow Jones News
Swisscom AG (SCMN.VX) Wednesday repeated its sales outlook for
the year even though sales in the second quarter fell and its net
profit missed analysts' expectations.
The Bern-based telecommunications company said it still expects
sales in the full-year to be 9.15 billion Swiss francs ($8.8
billion), even though second quarter revenue fell 0.3% to CHF2.99
billion as Italian broadband unit Fastweb contributed lower
sales.
Net profit for the three months fell 7% to CHF493 million, from
CHF530 million a year earlier, below analysts' expectations for
CHF503 million.
Swisscom repeated its outlook for the year, which is for revenue
of roughly CHF9.15 billion, not including Italian broadband unit
Fastweb SpA (FWB.MI); earnings before interest, depreciation and
amortization of CHF3.75 billion and capital expenditure of roughly
CHF1.3 billion.
Swisscom in the first quarter took a charge of CHF100 million in
risk provisions for Fastweb after prosecutors placed the Italian
unit's head Stefano Parisi under investigation for alleged tax
fraud. Parisi voluntarily suspended himself in April, as part of an
agreement with prosecutors to avoid placing the company under
court-administration.
Fastweb's chairman and Swisscom Chief Executive Carsten Schloter
is filling in as CEO of the Italian unit while the investigation is
under way.
Swisscom shares, which have shed 0.1% so far this year amid a
6.1% drop in the Stoxx Telecom index, closed at CHF395.10
Wednesday, giving the company a market capitalization of $19.4
billion.
Swisscom, which is majority-owned by the Swiss government, has
seen increasing competition in recent years as international brands
such as France Telecom SA's (FTE) Orange and Danish TDC AS's
(TDC.KO) Sunrise enter the Swiss market.
Swisscom said its full-year free cash flow, not including
special payments such as provisions for legal proceedings, will be
roughly CHF2.6 billion.
Swisscom shares are known as a defensive bet on regular
shareholder payouts; in 2009, the company paid a CHF20-a-share
dividend, which translates to a 5.1% dividend yield, according to
Bank Vontobel.
-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043;
katharina.bart@dowjones.com
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