Deutsche Telekom shares advance on earnings beat

BERLIN: Deutsche Telekom raised its 2021 profit guidance on Wednesday ater a strong showing by its businesses in the United States and Europe in the first quarter, with group revenue and core profit beating market estimates.

Shares rallied by 2 per cent on the results and guidance, which analysts said represented a show of strength at Deutsche Telekom’s operations outside the United States despite the COVID-19 pandemic.

“We are sustaining momentum and continuing our successful growth story,” said Chief Financial Officer Christian Illek. “Our customer numbers and key financial metrics are on track on both sides of the Atlantic.”

Jefferies analyst Ulrich Rathe said the quarterly report “bodes well” for Deutsche Telekom’s forthcoming capital markets presentation over May 20-21, when management is due to present new mid-term targets.

Following raised guidance from US business T-mobile, which has already reported results, Deutsche Telekom also nudged up the 2021 outlook for profit and cash flow at its European operations.

It now expects group adjusted earnings before interest, tax, depreciation and amortisation ater leases (Ebitda AL) to exceed 37 billion euros ($44.8 billion) and free cash flow ater leases to exceed 8 billion euros.

Previously core profit had been forecast at about 37 billion euros and free cash flow at around 8 billion euros.

First-quarter revenue increased by 32.3 per cent to 26.39 billion euros, beating consensus estimates of 25.595 billion euros in a poll of analysts published by the company.