Zacks Analyst Blog Highlights: Telefonica SA, Vodafone, Deutsche Telekom, France Telecom and Apple

CHICAGO--(BUSINESS WIRE)--Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Telefonica SA (NYSE: TEF), Vodafone (Nasdaq: VOD), Deutsche Telekom (NYSE: DT), France Telecom (NYSE: FTE) and Apple (Nasdaq: AAPL).

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Here are highlights from Tuesday’s Analyst Blog:

Telefonica Tops, Profit Leaps

Telefonica SA (NYSE: TEF) reported fourth-quarter 2009 results with earnings per ADS of US$2.37, comfortably beating the Zacks Consensus Estimate of US$1.63. The Spanish telecom behemoth reported a net income of €2.44 billion (US$3.60 billion), up 22% year-over-year, supported by higher sales as a result of healthy subscriber accretion in Latin America as well as lower taxes.

For 2009, net income increased 2.4% year-over-year to €7.78 billion (US$10.85 billion) or €1.71 a share (or US$7.14 per ADS), missing the Zacks Consensus Estimate of US$7.19. The current Zacks Consensus Estimate for 2010 EPS is US$7.56.

Consolidated revenue for the quarter grew 1.2% year-over-year to €14.97 billion (US$22.1 billion), beating the Zacks Consensus Estimate of US$20.4 billion. Latin America contributed 42% of the group’s revenues followed by Spain at 34% and Europe at 23%. Revenue for 2009 declined 2.1% year-over-year to €56.73 billion (US$79.1 billion), missing the Zacks Consensus Estimate of US$80.3 billion.

Telefonica Espana

The company’s Spanish revenue declined 1.6% year-over-year to €5.05 billion (US$7.5 billion), impacted by a reduction in mobile termination rates (inter-operator fees) and the economic downturn. Wireline business revenues increased 1.8% year-over-year to €3.2 billion (US$4.7 billion) while revenue from wireless operation declined 4.4% to €2.3 billion (US$3.4 billion).

Telefonica Europe

Revenue from Europe declined 3.9% year-over-year to €3.5 billion (US$5.2 billion), especially due to lower revenue from the UK operation. Reported revenue from the company’s UK wireless operation O2 UK (highest contributor to European sales) was €1.6 billion (US$2.4 billion), down 6.5% over the year-ago quarter, due to competition and termination rate cuts. Revenues from Germany increased 7.2% while in the Czech Republic they declined 11.1%.

O2 UK continues to struggle, with declining revenues as the operator faces intense competition, especially from its biggest rival Vodafone (Nasdaq: VOD). Competition is set to intensify in the British mobile market as the other two major carriers Deutsche Telekom (NYSE: DT) and France Telecom (NYSE: FTE) are set to merge their UK operations.

The integrated company will dethrone O2 UK as the largest wireless carrier in the UK. Moreover, O2 UK lost exclusivity on Apple’s (Nasdaq: AAPL) iPhone in the UK as Vodafone and France Telecom’s Orange UK began selling the iconic device in late 2009.

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