By Cristina Roca
Shares in Telecom Italia SpA fell sharply Tuesday after the company's first-quarter results fell short of analysts' expectations, hit by the coronavirus pandemic.
Revenue for the period fell to 3.96 billion euros ($4.3 billion) from EUR4.47 billion, dragged by shop closures due to the coronavirus lockdown, a product-portfolio rationalization and the introduction of more disciplined commercial policies, Telecom Italia said.
Revenue came below expectations, reflecting continued weakness in the company's main market of Italy, according to analysts at Bryan Garnier and Equita SIM.
At GMT 0840, shares in the Italian telecommunications company traded 6.4% lower at EUR0.36.
Telecom Italia's earnings before interest and taxes for the quarter were lower at EUR533 million compared with EUR683 million a year prior, while earnings before interest, taxes, depreciation, and amortization, or Ebitda, fell to EUR1.74 billion from EUR1.95 billion.
Net profit rose to EUR560 million euros from EUR165 million for the first quarter of 2019, but this was mostly the effect of a EUR441 million gain from the merger of its Inwit business with Vodafone Group PLC's mobile towers.
Telecom Italia said that it has signed a new revolving EUR1.7 billion credit line from a group of banks, to firm up liquidity during the coronavirus uncertainty.
Looking to the future, Telecom Italia expects to preserve its Ebitda and capital expenditure guidance, as well as cumulated 2020-22 equity free cash flow of EUR4.5 billion to EUR5 billion, the company said.
Bryan Garnier analysts said the company's debt reduction outlook is good, but saw its 2020 Ebitda guidance at risk, especially given the hit from the coronavirus.
Write to Cristina Roca at firstname.lastname@example.org; @_cristinaroca