MANILA - Philippine Long Distance Telephone Co (PLDT), the country's most valuable firm, trimmed its full-year revenue guidance, reckoning strong typhoons that have battered parts of the country may dent consumer spending.
While PLDT cut the revenue forecast by 1% to P146 billion ($3.06 billion), it kept its core earnings guidance, which strips out currency and derivatives gains, at P41 billion, up 8% from 2008.
Analysts also expect PLDT to post 2009 net profit of around 41 billion pesos, up 18.2 percent, based on Thomson Reuters, as spending ahead of May 2010 presidential polls boosts earnings.
PLDT, owned by Hong Kong's First Pacific Co Ltd, Japan's NTT Communications and NTT DoCoMo, said July-September net income jumped 49% to P10.3 billion, as its foray into power distribution helped mask slower growth in its main mobile phone business. Analysts had forecast profit of P9.9 billion.
"While we anticipate the usual boost in the fourth quarter from holiday spending, we expect this may be somewhat dampened as the recent typhoons caused extensive damage all around," Chairman Manuel Pangilinan said in a statement.
Aggressive pricing promotions by rivals have forced PLDT to come up with cheaper mobile offerings, and a recent regulation to extend the life of phone cards has made it tougher for PLDT to grow its revenue.
"The macroeconomy is still weak, but there is also an element of increasing competition," said Jody Santiago, head of research at UBS Securities Philippines Inc.
The company added a net 580,000 mobile subscribers in July-September, the lowest tally in 11 quarters.
"For me, the third quarter marks an inflection point showing that the growth period may be finished and that there is a risk of a decline in operations," Santiago said.
He said PLDT's Meralco earnings could compensate for weaknesses in its traditional operations.
PLDT hopes recent investments in a local broadcaster and in Manila Electric Co (Meralco), the country's largest power retailer, will fortify its dominance of the domestic telecoms market.
PLDT said its mobile service revenue, accounting for nearly two-thirds of the group total, was flat in the third quarter, while earnings before interest, tax and depreciation fell 3%. Core earnings climbed 11% to P10.1 billion.
PLDT shares closed down 0.8% after the results in a flat broader market. as of 11/03/2009 9:33 PM
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