Deutsche Telekom AG lost euro582 million ($802 million) in the fourth quarter as writedowns on its Greek and Romanian operations and a special tax in Hungary weighed on earnings, the company said Friday.
The October-December performance at the German telecommunications group compared with a net loss of euro3 million a year earlier and disappointed analysts' forecasts for a profit of euro572 million.
Revenues declined by 4.5 percent to euro15.48 billion, just above market expectations for euro15.4 billion as polled by FactSet.
Various special and one-time factors knocked some euro1.3 billion off net earnings for the quarter, Deutsche Telekom said.
Those included an impairment of goodwill, property and equipment in Greece and Romania; a tax levied in Hungary on telecoms and other companies; and a settlement in Poland, where the company resolved a long-running dispute over the ownership of mobile network PTC.
For the full year, net profit soared to euro1.7 billion from euro353 million in 2009. Revenues declined 3.4 percent to euro62.42 billion.
Deutsche Telekom said it expects earnings to remain "almost stable" in 2011, with adjusted pretax earnings _ which came in at euro19.5 billion last year _ forecast just a little lower at some euro19.1 billion. The company said it expects to at least match last year's level of free cash flow.
Deutsche Telekom said it would propose a dividend of euro0.70 per share, down from euro0.78 for 2009.
CEO Rene Obermann described the 2010 performance as solid.
"We have battled through the headwind caused by the economic environment, special taxes in several countries, and stiff competition," he said.
He added that he was "particularly pleased" about a slight 0.4 percent increase in full-year revenue that results from adjusting the figures to reflect the deconsolidation of British cell phone unit T-Mobile UK, which became part of a joint venture with France Telecom in April.
The company said revenue in its German home market edged up 0.6 percent in the fourth quarter, though for the full year it slipped 1.1 percent. It saw big increases in mobile data revenues and smartphone sales.
Elsewhere in Europe, Deutsche Telekom said that "overall economic conditions are still making things difficult for Greece and Romania, (but) other countries are starting to show signs of recovery." Poland's PTC saw a 4.7 increase in revenue last year.
T-Mobile USA again saw "disappointing" customer development in the fourth quarter, with a net loss of 23,000 customers, the company said. Tackling that problem is a key element of goals for the unit that were unveiled last month.
The unit's total revenue for 2010 was $21.3 billion, "almost on a par" with the previous year, but adjusted pretax earnings were down 7.1 percent at $5.5 billion, Deutsche Telekom said.
The company's shares were down 1.6 percent in early Frankfurt trading at euro9.76.