Deutsche Telekom posted a EUR6.9 billion Q3 net loss today on the back of a hefty impairment charge at its US arm, T-Mobile USA.
The Germany-based giant described the EUR7.4 billion charge as an “impairment test” related to T-Mobile USA’s planned merger with MetroPCS.
“We made a forward-looking decision for our US business in full awareness of the accounting consequences,” explained CEO Rene Obermann. “Anyone seeing only the clear net loss is overlooking the fact that our operating business is completely on track. Unlike many of our competitors, we offer reliability.”
Without the charge, the group would have posted a EUR900 million profit, down 28.3 percent from the prior year. Stripping out factors related to last year’s aborted sale of T-Mobile USA to AT&T, the company says net profit would have remained stable.
Third-quarter revenue was down just 0.1 percent to EUR14.7 billion, beating the EUR14.6 billion average predicted by analysts in a Bloomberg poll.
Sales were boosted by a better-than-expected performance in Deutsche Telekom’s home market. German revenue came in at EUR5.7 billion, down 1.3 percent. Sales in the Europe segment (which excludes Germany) declined 5.7 percent year-on-year to EUR3.7 billion, while US sales were up 6.3 percent to EUR3.9 billion.
Mobile subscribers in Germany were up 3.1 percent to 36 million, up 3.5 percent in Europe to 61.5 million, and down 1.1 percent to 33.3 million in the US.