Mobile Division Propels Deutsche Telekom Growth (DT)

| About: Deutsche Telekom (DTEGY)

Deutsche Telekom reported earnings this morning. Highlights include:

  • Revenue: Up 5.4% to $18.5 billion this quarter. Annual reveue was $71.1 billion, up 3.9% over last year.
  • Earnings: $1.18 billion for the quarter, down from $2.08 billion a year earlier. Full year net profit was $6.7 billion.
  • Dividends: DT will increase its dividends 16% to 86 U.S. cents
  • Mobile Division: Sales grew 17.5% to $9.4 billion between October-December, and 11% over the year to $35.2 billion. T-Mobile USA was a major contributor to the growth, with a hike in subscribers of 25% to 21.7 million in 2005.
  • 2006 Guidance: DT expects flat or lower earnings in 2006 and improving profits in 2007; EBITDA expectations are $24.1-24.7 billion in 2006 and up to $26.5 billion in 2007.
  • As reported by Forbes, the quarter came in largely above analyst expectations:

    WestLB: "Even though the dividend outlook does not look overly bullish at first glance, we expect attention to return to Deutsche Telekom's high payout potential and its current attractive dividend yields."

    LRP: Maintained Outperformer rating, and noted the 'excellent' level of divident payout.

    Merrill Lynch: T-Mobile Germany had "good numbers and (were) definitely a surprise to us."