UPDATE 1-Portugal Telecom profit halves on recession, forex impact
* Forex impact of 100 mln euros due to weaker Brazilian real
* Bundled services sales, cost cuts cushion profit drop (Adds revenues in Brazil, Portugal, size of forex impact)
LISBON May 23 (Reuters) - Portugal Telecom (PT) said on Thursday its first-quarter net profit halved from a year ago amid a deep recession at home and due to a strong foreign exchange impact on its Brazilian revenues, but it still exceeded market expectations.
PT's net profit fell 52 percent to 27 million euros ($34.8 million), compared to an average of 23 million euros predicted by analysts in a Reuters poll. The fall was cushioned by growing sales of bundled TV, phone and Internet services and a reduction in operating costs of 10 percent to 1.03 billion euros.
Revenues fell 9.5 percent to 1.55 billion euros with Brazil's Oi bringing in 724 million euros, or 8 percent less than a year ago, "reflecting primarily the impact of the depreciation of the Brazilian real against the euro" worth 100 million euros, PT said.
But it added that without the currency impact, revenues from Brazil's largest telecommunications company, in which PT holds a 25 percent stake, would have risen.
PT's domestic revenue fell about 7 percent to 634 million euros due to the bailed out country's worst recession since the 1970s.
PT said earnings before interest, taxes, depreciation and amortization dropped almost 8 percent to 526 million euros, also exceeding analysts' expectations of 515 million euros.
($1 = 0.7766 euros) (Reporting By Andrei Khalip and Filipe Alves; editing by James Jukwey)
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