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China Telecom Q2 profit beats estimate
By Zhu Shenshen |
August 22, 2012, Wednesday
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Online Edition
Online Edition
CHINA Telecom today announced a better-than-expected net profit in the second quarter after it started sales of the new iPhone in March, which helped the country's third biggest mobile carrier attract high-end users.
Net profit was 4.55 billion yuan (US$715 million), a 10 percent fall from a year ago. But it's higher than the analysts' average estimate of 4.4 billion yuan.
China Telecom, also the country's biggest fixed-line phone operator, generated a revenue of 70.1 billion yuan in the quarter, a 14 percent growth year-on-year.
China Telecom's profit was "steady" due to fixed-line phone and broadband growth, especially smart phone income growth, while margin dilution from iPhone 4S debut in March should be "manageable" given controlled iPhone sales, Morgan Stanley said in a note.
By 2pm, HK-listed China Telecom jumped 3.5 percent to HK$4.14 (65 US cents). The near-term price target of the company is HK$4.28, according to Morgan Stanley.
China Telecom's earnings declined because of rising handset subsidies on iPhones. But in a longer time, the new iPhone user will help the carrier generate profit and compete with bigger rivals like China Mobile and China Unicom, analysts said.
Net profit was 4.55 billion yuan (US$715 million), a 10 percent fall from a year ago. But it's higher than the analysts' average estimate of 4.4 billion yuan.
China Telecom, also the country's biggest fixed-line phone operator, generated a revenue of 70.1 billion yuan in the quarter, a 14 percent growth year-on-year.
China Telecom's profit was "steady" due to fixed-line phone and broadband growth, especially smart phone income growth, while margin dilution from iPhone 4S debut in March should be "manageable" given controlled iPhone sales, Morgan Stanley said in a note.
By 2pm, HK-listed China Telecom jumped 3.5 percent to HK$4.14 (65 US cents). The near-term price target of the company is HK$4.28, according to Morgan Stanley.
China Telecom's earnings declined because of rising handset subsidies on iPhones. But in a longer time, the new iPhone user will help the carrier generate profit and compete with bigger rivals like China Mobile and China Unicom, analysts said.
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