* EBITDA down 8.4 pct to 2.20 bln euros vs consensus 2.21
* Revenues down 11.9 pct to 5.19 bln euros vs consensus 5.22
* CEO expects "progressive acceleration" in recovery
* Shares down 2 pct, as Italy mobile trend disappoints
(Adds analyst comment, details on mobile trends)
By Danilo Masoni
MILAN, May 13 Telecom Italia said on
Tuesday it expected a gradual recovery in earnings this year
after posting an 8.4 percent fall in first-quarter core profit
to reflect declining sales in Italy and a weaker currency in
Its mobile business in Italy was weaker than some had
expected due to a fierce price war with rivals including
Vodafone and Vimpelcom's Wind, while its
messaging services are threatened by online rivals, such as
Facebook Inc's WhatsApp.
By 0936 GMT, shares in Italy's largest telecoms company,
fell 2.7 percent at 0.900 euros, underperforming an 0.6 percent
fall in the European telecoms index.
"EBITDA was slightly below our estimates, which incorporated
a better trend of domestic margins with a slower decline in
sales from (mobile business) Tim Italia," said ICBPI analyst
Stefano Vulpiani in a note.
The weak domestic results mean the company will have to work
harder to meet its targets for stable revenue and profit in
2016. Analysts, however, forecast 2016 revenue will fall 2
percent from 2014, while core profit will slip 3 percent,
according to Thomson Reuters data.
"As a whole we are in line with our plans and targets, which
see a progressive acceleration in year-on-year recovery," Chief
Executive Marco Patuano, who was confirmed in his post in a
board renewal in April, said in a statement.
Overall results were in line with market expectations,
thanks to a Brazil, which makes almost a third of its total
turnover. First-quarter sales in the south American market,
where it operates thorough its TIM Participacoes
unit, were stable in local currency terms.
Telecom Italia posted 2.20 billion euros in core profit, or
earning before interest, taxes, depreciation and amortisation
(EBITDA), broadly in line with a Thomson Reuters I/B/E/S
consensus. Revenues fell 11.9 percent to 5.19 billion euros,
against a consensus forecast of 5.22 billion.
The quarterly decline in Italian mobile revenues of 14.4
percent was larger than expected, an analyst said.
Telecom Italia said it saw a gradual recovery in operating
performance in Italy, helped by cost cutting measures.
Patuano, who took the top job at the former monopoly in
October, is carrying out asset disposals to cut debt and fund
investments with the aim of keeping revenue and core profit
stable by 2016.
Adjusted net debt edged up to 27.5 billion euros, slightly
above a consensus estimate of 27.2 billion.
Since his arrival the stock has gained 45 percent, helped by
speculation of possible consolidation in Brazil, its
second-largest market where it operates through wireless
operator TIM Brazil.
($1 = 0.7270 Euros)
(Editing by Jason Neely and Louise Heavens)