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Deutsche Telekom reported a surprising Q4 net loss of €898 million ($1.2b), after earning €991m in its prior Q4, compared to analysts' average net profit estimate of €667m. The loss is attributed to costs related to job cuts and continued weakness at its domestic fixed-line business. Deutsche-Telekom-DT-chart-02-28-07 Revenues meanwhile, increased 2.4% to €15.9b, helped by strength in its overseas businesses and at T-Mobile USA in particular. Excluding one-time charges net profit would have totaled €824m. In late January, Deutsche Telekom issued its second profit warning in six months, but even with today's negative earnings release and plans for further restructuring, it is maintaining its 72 euro cents/share dividend payment. The Wall Street Journal notes analysts say Deutsche Telekom's shares are more expensive than some of its European rivals' despite having underperformed peers over the past year. Its shares are down about 2.6% to €13.21 in morning trading in Frankfurt.

Sources: Press release [I, II], Bloomberg, MarketWatch, The Wall Street Journal
Commentary: Dutch Telecom Consolidation Likely to Accelerate European M&ADeutsche Telekom Issues Second Profit Warning in Six MonthsBarron's Euro Dogs of the Dow 2007
Stocks/ETFs to watch: Deutsche Telekom (DT). Competitors: BT Group (NYSE:BT), France Telecom (FTE), Vodafone Group (NASDAQ:VOD), Telecom Italia (NYSE:TI), Telefonica SA (NYSE:TEF). ETFs: Wireless HOLDRs (NYSEARCA:WMH), iShares MSCI Germany Index (NYSEARCA:EWG)

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Source: Deutsche Telekom Reports Q4 Loss, More Restructuring Expected