Swisscom 9Q Net Profit Down 8.2%, Upgrades Guidance

Swiss telecommunications company Swisscom AG (SCM) Tuesday reported a 8.2% drop in net profit for the first nine months on a 0.6% increase in sales, and increased its full year outlook.

MAIN POINTS:

-9M net profit CHF1.41 billion versus CHF1.53 billion, mainly as a result of the provision and an increase in depreciation.

-9M revenue CHF8.98 billion versus CHF8.93 billion.

The increase is primarily attributable to the economic recovery, company acquisitions made by Swisscom IT Services as well as growth in mobile communications and bundled products.

-Outlook: The financial outlook for the 2010 financial year is being revised upwards.

Swisscom's expected net revenue (excluding Fastweb) has been revised upwards to around CHF 9.35 billion and EBITDA to around CHF 4.0 billion. Capital expenditure remains unchanged at around CHF 1.3 billion.

As a result of a change in revenue recognition, net revenue and EBITDA at Fastweb could be between 3% and 5% down on the previous expectations of EUR 1.95 billion and EUR 580 million (excl. a provision for the VAT proceedings) respectively. Fastweb's capital expenditure could be up to 5% higher than the previous assumption of around EUR 410 million.

Across the Group, Swisscom now anticipates net revenue of around CHF 12 billion and EBITDA of around CHF 4.7 billion (incl. a provision for the VAT proceedings against Fastweb). Expectations concerning revenue and EBITDA have thus been stepped up by some CHF 100 million each. Excluding any special payments of provisions for ongoing legal proceedings, operating free cash flow will remain unchanged at around CHF 2.6 billion.

-With immediate effect, Alberto Calcagno (38) will take over as general manager (Direttore Generale)

of Fastweb

-Eight analysts polled by Dow Jones Newswires on average forecast a net profit of CHF506.8 million

-Eight analysts polled by Dow Jones Newswires on avrage forecast revenue of CHF2.97 billion

-By Anita Greil, Dow Jones Newswires; [phone] ; [e-mail]