France Telecom Q1 sales, cash flow drop on France
PARIS (Reuters) - France Telecom FTE.PA reported lower first-quarter sales, slightly short of expectations, because of price pressure in mobile in France and weaker demand from corporate clients, but limited margin erosion through cost control.
First-quarter operating cash flow fell 12.9 percent on a comparable basis to 1.98 billion euros ($2.58 billion), in a sign of how the operator's home market became structurally less profitable in the past year with the arrival of low-cost mobile player Iliad (ILD.PA).
Sales fell 4.1 percent to 10.28 billion euros, while earnings before interest, tax, depreciation and amortization (EBITDA) stood at 3.12 billion, giving it an operating margin of 30.4 percent.
Analysts had on average been expecting revenue of 10.35 billion euros and EBITDA of 3.12 billion, according to Thomson Reuters I/B/E/S.
Spain and France Telecom's Africa and Middle East operations grew their sales in the quarter, but Poland was hit hard by changes in mobile call termination fees and an ensuing price war.
Europe's fourth-biggest telecom operator by sales also confirmed its 2013 targets of a stable dividend at 0.80 euros per share and operating cash flow above 7 billion this year, compared with about 8 billion last year.
France represents about 60 percent of the group's cash flow and valuation and half of revenue.
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