Deutsche Telekom Q2 core profit beats view on growth in U.S.

FRANKFURT Thu Aug 7, 2014 1:04am EDT

FRANKFURT Aug 7 (Reuters) - Deutsche Telekom reported a bigger than expected quarterly core profit as investments in the United States to improve its networks and add customers started to pay off.

Second-quarter earnings before interest, tax, depreciation and amortisation (EBITDA), excluding special items, rose to 4.43 billion euros ($5.9 billion) , above the average forecast of 4.35 billion euros in a Reuters poll.

The German telecoms operator said on Thursday it still expected 2014 EBITDA, excluding special items, to remain stable at around 17.6 billion euros in 2014 and that free cash flow would drop to around 4.2 billion euros on additional investments.

Deutsche Telekom faces a tough decision whether to stay in the United States after its preferred strategy of selling T-Mobile US to its bigger rival Sprint crashed into a regulatory wall.

The company did not make any comments about the process in its earnings statement. A spokesman declined to comment on the matter and referred to a conference call with Deutsche Telekom's management due at 0800 GMT.

($1 = 0.7470 euro) (Reporting by Harro ten Wolde; Editing by Maria Sheahan)