Telefonica's Q4 Earnings Decline, Revenues Increase Y/Y

Telefonica, S.A. TEF reported a fourth-quarter 2024 net income of €425 million, which plummeted 41.8% year over year. Furthermore, basic earnings per share (EPS) were €0.06 compared with €0.12 in the year-ago quarter. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Quarterly total revenues increased 5.4% year over year to €10,701 million, driven by strong business performance and positive commercial momentum in key markets. This growth was reflected across major segments, with residential revenues rising 6.5% and the business segment up 10%.For 2024, revenue increased 1.6% year over year, reaching €41,315 million, exceeding the initial target of around 1% growth.Results by Business UnitsTelefonica Espana: Quarterly revenues in Spain increased 1.3% year over year on a reported basis to €3,364 million, driven by an 8.9% increase in handset sales following successful Black Friday and Christmas campaigns, along with steady service revenue growth of 1%. The quarterly adjusted EBITDA grew 1% to €1,255 million, owing to higher revenues and cost-saving measures, including the staff reduction and network upgrades carried out in the first quarter.Telefonica Deutschland: Quarterly revenues fell 3.7% to €2,205 million due to sluggish trends across the mobile business amid growth in the fixed business. The quarterly adjusted EBITDA margin was 33.4%. Capital expenditure (CapEx) rose 8.2% to €343 million in the quarter.VirginMedia-O2 U.K.: Quarterly revenues inched down 0.1% to €3,263 million. The quarterly adjusted EBITDA margin was 36.6%. CapEx grew 23.2% to €661 million in the quarter.Telefonica Brasil: Quarterly revenues in Brazil decreased 7.4% to €2,350 million due to forex headwinds. The quarterly adjusted EBITDA declined 6.9% to €1,050 million. CapEx decreased 7.8% to €397 million in the quarter.Telefonica SA Price, Consensus and EPS Surprise Telefonica SA price-consensus-eps-surprise-chart | Telefonica SA Quote Telefonica Infra (Telxius): The unit expanded its FTTH coverage to 25 million premises. Telxius, Telefonica’s submarine cable unit, maintained high profitability with an EBITDA margin of 48%.Telefonica Tech: Revenues increased 11.1% year over year to €612 million, fueled by strength in cybersecurity and IoT business, mainly in the Private Sector. Its strong sales momentum and the rapidly expanding open funnel, which continues to grow at a double-digit rate, are expected to have a positive impact throughout 2025.Telefonica Hispam: Quarterly revenues in the Telefonica Hispam segment climbed 47.1% to €2,432 million, mainly due to a lower comparison base from the prior-year quarter, which was affected by the ARS depreciation. Other factors included the adoption of a new exchange rate in Venezuela and the one-time revenue recorded in the prior-year quarter from exclusivity deals with ONNet Chile and Colombia.Other DetailQuarterly adjusted EBITDA was €1,701 million, down 5.2% year over year. Operating loss was €511 million in the quarter under review compared with a loss of €382 million in the prior-year quarter.Cash Flow & LiquidityFor the year that ended Dec 31, 2024, Telefonica generated €10,994 million of net cash from operating activities compared with €11,649 million a year ago. The free cash flow for the same period totaled €2,634 million, exceeding the target of more than 10% growth, with an impressive 14.1% increase from the previous year.As of Dec 31, 2024, the company had €8,062 million in cash and cash equivalents, with €33,192 million of non-current financial liabilities.2025 Financial GuidanceThe company expects continued organic growth in revenues, EBITDA, and EBITDAaL – CapEx for 2025. Free cash flow is expected to remain at similar levels as 2024. In addition, the company has confirmed a cash dividend of €0.30 per share for 2025, to be distributed in two installments—€0.15 per share in December 2025 and €0.15 per share in June 2026. The second tranche of the 2024 dividend will be paid in June 2025, ensuring continued returns for shareholders.TEF’s Zacks RankTelefonica currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Recent Performance of Other CompaniesBCE Inc. BCE reported fourth-quarter 2024 adjusted EPS of C$0.79 (56 cents) compared with C$0.76 in the prior-year quarter. The Zacks Consensus Estimate was pegged at 50 cents.Shares of BCE have plunged 37.3% in the past year. Iridium Communications IRDM reported EPS of 32 cents for the fourth quarter of 2024, beating the Zacks Consensus Estimate by 94%. The bottom line compared favorably with the prior quarter's figure of 30 cents per share.In the past year, IRDM shares have risen 5.1%.Gilat Satellite Networks Ltd. GILT reported fourth-quarter 2024 adjusted EPS of 15 cents compared with 11 cents a year ago. The bottom line beat the Zacks Consensus Estimate by 7.14%.Shares of GILT have soared 52.7% in the past six months.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Telefonica SA (TEF): Free Stock Analysis Report BCE, Inc. (BCE): Free Stock Analysis Report Iridium Communications Inc (IRDM): Free Stock Analysis Report Gilat Satellite Networks Ltd. (GILT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks