Telefonica 2Q Net Profit Rises 70%

By David Roman

MADRID--Telefonica SA Thursday posted a 70% annual increase in second-quarter net profit, driven by extraordinary gains related to recent acquisitions in Latin America and Europe.

The Madrid-based company said net profit stood at 1.89 billion euros ($2.09 billion) in the quarter, compared with EUR1.11 billion a year earlier. Analysts polled by FactSet were expecting a EUR1 billion net profit.

Earnings before interest and taxes fell 11% to EUR1.56 billion, roughly in line with analysts' expectations, even as revenue rose 12% to EUR11.88 billion.

Sales were bolstered by the recent takeover of E-Plus in Germany and the inclusion of Brazil's GVT--a company that Telefonica agreed to buy last year--in the accounts from May. Fast growth in several Latin American markets provided the bulk of Telefonica revenue.

Telefonica Brasil, Brazil's top operator by market share, Wednesday posted a 56.4% decrease in second-quarter net profit, largely due to the absence of extraordinary gains that inflated profit in 2014, on revenue of 10.42 billion Brazilian real ($3.1 billion), up 5.4% year-over-year.

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