Profits at Spanish-based operator giant Telefonica slumped 27 percent in the second-quarter, as the firm was hit by weaknesses in its home market and a write-down on its stake in Telecom Italia. Net income fell 27.4 percent to EUR1.54 billion in Q2, below the EUR1.64 billion predicted by analysts in a Bloomberg poll. Sales climbed 2.2 percent to EUR15.45 billion, but were also below expectations of around EUR15.7 billion. Revenues in Spain fell 6.6 percent to EUR4.4 billion, though this was offset by growth in Telefonica’s Latin American business, which saw revenues grow 12 percent to EUR 7.11 billion, fuelled by a particularly strong performance in Brazil. Latin America now accounts for half of group sales.

“In the first half of the year, Telefónica España’s businesses continued to be shaped by weak consumer consumption in Spain combined with intense competition,” said the firm in a statement. The operator is planning to eliminate as many as 6,500 jobs in Spain – mainly in the fixed-line business – as part of redundancy plan that will cost it EUR2.7 billion this year. Meanwhile, the revision of the value of its stake in Telecom Italia reduced net income in the first half-year by EUR353 million. Total mobile customers reached 227.3 million by the end of the first half of 2011, up 8 percent year-on-year in both organic and reported terms. Contract customers now account for 32 percent of this total.