News after the bell! Oughta be good for a couple of points
tomorrow. Comments?
sf
================================================================
Hefty Telebras (NYSE:TBR) net sets stage for strong H2
Reuters, Thursday, August 07, 1997 at 16:05
By James Craig
SAO PAULO, Aug 7 (Reuter) - Strong second quarter earnings
at Brazil's Telebras (SAO:TEL_.P) have cemented the firm's lead
among profitable Latin American telecoms and set the stage for
a muscular second half, bank analysts said.
The federal telecom's 1.494 billion real ($1.4 billion)
six-month consolidated net profit was mostly in line with
market projections, but analysts were pleasantly surprised by
strong June results.
"The figures for June were exceptional," said analyst
William Laurent of Robert Fleming & Co Ltd in London.
The 315 million real net profit in June -- up a sharp 33
percent from the January-May monthly average -- was important
because it was the first full month after a final rate
restructuring, analysts said.
The numbers also were affected by changes in the amount of
revenue Telebras units must remit to long-distance unit
Embratel, they said.
As a result, Telebras' second half earnings of 803 million
reais, up 16 percent from the first quarter and the same from
second-quarter 1996, give the market a clearer idea what
revenue will look like in 1997's last six months, they added.
"The numbers reflect the tariff rebalancing and, with
increased line and traffic growth, I expect even better numbers
in the next two quarters," said Marcelo Mollica of local
investmant bank Icatu.
Telebras reported 1.2 million fixed and cellular lines
installed in the first half and forecasts are for a total of at
least 3.1 million new lines for the year.
Analysts are projecting a whopping $3.3 billion net income
for Telebras this year, according to the latest Reuters survey
of Telebras forecasts , a figure far above the company's
regional peers.
"To put it in perspective, net income for the year will be
more than all other telcos in Latin America combined. More than
CTC (NYSE:CTC), Telefonica del Peru (NYSE:TDP), Telmex (NYSE:TMX) and
all the others put together," Laurent said.
Although Telebras stock has slid off highs in early July,
the drop is due mostly to devaluation fears and worries about
Brazil's external accounts, not the company's fundamentals or
performance, analysts said.
Despite high market volatility, Telebras, which normally
making up 65 percent of total daily cash volume, has begun
creeping back up on the strength of its results and on bright
prospects for privatization.
Its benchmark preferred (SAO:TEL_.P), the underlying share
for the firm's American Depositary Receipt (ADR), surged 7.19
percent to end 156.50 reais Wednesday after Communications
Minister Sergio Motta reiterated the government hopes for
selling the company by mid-1998.
Plans for privatizing Latin America's largest
telecommunications firm have drawn the interest of nearly all
major global telecoms and helped boost its stock by more than
80 percent this year.
After China, Brazil is considered the most-promising
emerging telecoms market in the world.
Copyright 1997, Reuters News Service |
