Tele Norte Leste Participacoes SA,
Brazil’s biggest fixed-line telephone company, posted a second-
quarter profit as it boosted its rate of broadband Internet and
mobile phone subscribers.
Oi, as the company is known, reported net income of 444
million reais ($252.6 million), compared with a loss of 146
million reais a year earlier, the Rio de Janeiro-based company
said yesterday in a regulatory filing. Earnings fell short of
the average estimate of 449.4 million reais in a Bloomberg
survey of five analysts. Sales rose 1.3 percent to 7.39 billion
reais.
The number of additional broadband Internet subscribers the
company drew rose 11 percent compared with the same period last
year. Oi also added 3.3 million more mobile phone subscribers.
Oi rose 1.3 percent, or 34 centavos, to 26.18 reais, in Sao
Paulo trading at 9:35 a.m. New York time, its first gain in
three days. Oi’s shares completed their biggest two-day decline
in almost four years yesterday after the company announced it
would sell stock to existing holders to raise 12 billion reais
as part of the deal to sell a stake for about 8.4 billion reais
to Portugal Telecom SGPS SA. Oi’s Telemar Norte Leste SA unit
will also offer existing shareholders 12 billion reais in stock.
UBS AG cut Oi’s voting shares to “neutral” from “buy”
yesterday, as the capital increases will dilute earnings, UBS
analysts led by Tomas Lajous wrote in a note to clients.
Oi expects to save 600 million reais in synergies from
deals, including the acquisition of Brasil Telecom SA, in the
second half, and 1.2 billion reais this year, Chief Financial
Officer Alex Zornig said on a conference call yesterday.
The company’s shares have fallen by 23 percent since the
start of the year, while the Ibovespa index fell 2.4 percent.
Data released by Anatel, Brazil’s telecommunications
regulatory agency, show Oi had 20 percent of Brazil’s mobile
phone market in June, compared with 21 percent a year earlier.
Oi increased its mobile phone subscriber base by 9.7 percent
over the same period.
To contact the reporter on this story:
Robin Stringer in New York at
rstringer@bloomberg.net
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