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Telefonica, S.A. TEF reported a first-quarter 2025 net income of €427 million, which plummeted 26% year over year. Furthermore, basic earnings per share (EPS) were €0.06 (8 cents) compared with €0.09 in the year-ago quarter. The bottom line met the Zacks Consensus Estimate.
Total revenues decreased 2.9% year over year to €9,221 million ($9700 million) due to unfavorable foreign exchange rate movements. Despite this, the company achieved organic revenue growth of 1.3%, driven by strong performance in B2C (+5.4%) and B2B (+1.8%) segments. The top line missed the consensus mark by 14.5%.
The company strategically reduced its exposure to Hispam by divesting from Argentina and Peru and initiating the sale of its stake in Telefonica Colombia. These moves align with TEF’s broader plan to concentrate on profitable, scalable markets and optimize its portfolio.
Results by Business Units
Telefonica Espana: Quarterly revenues in Spain increased 1.7% year over year on a reported basis to €3,170 million, driven by strong handset sales and service revenues. Strength in retail was supported by a larger customer base, price hikes and strong IT sales, though it slowed slightly after a strong fourth-quarter performance in IT. The quarterly adjusted EBITDA grew 1% to €1,128 million, driven by higher revenues and efficiency gains from the March 2024 workforce realignment and network transformation.
Telefonica Deutschland: Quarterly revenues fell 2% to €2,056 million due to sluggish trends across the mobile business amid growth in the fixed business. The quarterly adjusted EBITDA margin was 31.1%. Capital expenditure (CapEx) plunged 12.9% to €203 million in the quarter.
VirginMedia-O2 U.K.: Quarterly revenues went down 1.8% to €2,968 million. The quarterly adjusted EBITDA margin was 36.3%. CapEx fell 10.8% to €596 million in the quarter.
Telefonica Brasil: Quarterly revenues in Brazil decreased 7.2% to €2,337 million due to forex headwinds. The quarterly adjusted EBITDA declined 5.7% to €964 million. CapEx decreased 13% to €303 million in the quarter.
Telefonica SA Price, Consensus and EPS Surprise
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Telefonica Infra (Telxius): Telxius, Telefonica’s submarine cable unit, saw 10% traffic growth year over year. Contract value with third parties rose 91%, and strong cost control helped keep profitability high, with a 49.8% EBITDA margin.
Telefonica Tech: Revenues increased 6.6% year over year to €508 million. Revenues are well-balanced across services, with a strong focus on Managed & Professional services and own platforms. More than 85% comes from hard-currency markets. The outlook for the year stays positive, supported by strong sales and a solid pipeline.
Telefonica Hispam: Revenues fell 8.6% year over year to €1,245 million, mainly due to Chile (which had one-time legacy network revenues in the prior year quarter) and weaker B2B results in Colombia. This was partly balanced by strong service revenue growth in Mexico, up 5% year over year.