Spain's Telefonica posts first loss in 9 years

AP News
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Posted: Nov 11, 2011 6:49 AM
Spain's Telefonica posts first loss in 9 years

Spanish telephone company Telefonica said Friday it lost euro429 million ($584 million) in the third quarter, its first quarterly loss in nine years, after hefty costs laying off workers in Spain's moribund economy.

It compared to profits of euro5.1 billion in the same period of 2010, although that figure included a one-off gain from Telefonica's takeover of Brazilian cell phone company Vivo.

Telefonica said the third quarter 2011 results included costs of euro1.87 billion in compensation for workers being laid off in Spain.

Revenue in Spain for the quarter was down 8.8 percent. But total revenue for the quarter _ in Spain and all the countries where Telefonica operates _ was up 3.7 percent to euro15.8 billion.

The poor performance in Spain was offset by a 17.5 percent rise in revenue in Latin America.

Telefonica is eliminating up to 6,500 jobs, or close to 20 percent of its work force, in Spain through 2013 to reduce costs.

Telefonica's profits for the first nine months of the year were down 69 percent to euro2.73 billion, again in part because of redundancy costs. Revenue for the January-September period rose 5.4 percent.

Telefonica shares were practically unchanged at euro13.9 in early trading.