March 30 (Bloomberg) -- Portugal Telecom SGPS SA, the country’s biggest telecommunications company, posted a 31 percent drop in fourth-quarter profit as operating costs and depreciation charges increased.
Net income fell to 37.6 million euros ($50 million) from 54.5 million euros a year earlier, the Lisbon-based company said today in a statement. Profit missed the 47.6 million-euro average of 10 analyst estimates compiled by Bloomberg.
The company posted “a weak set of results, below market expectations at all levels,” though there was “positive news on the sustainability of the dividend policy,” Pedro Pinto Oliveira, an analyst at Banco BPI in Oporto, Portugal, said in a research report today.
The company bought a stake in Brazilian phone company Telemar Norte Leste SA, also known as Oi, in March 2011 after selling its holding in Vivo Participacoes SA for 7.5 billion euros to Spain’s Telefonica SA, which produced a one-time gain in 2010. Depreciation costs last year increased amid the proportional consolidation of Oi and the Contax call-center business in Brazil, Portugal Telecom said.
Portugal Telecom fell 0.2 percent to 4.08 euros as of 10:41 a.m. in Lisbon. The stock has dropped 8.4 percent this year, valuing the company at about 3.65 billion euros.
The company is betting on Brazil to counter a slump in Portugal’s economy, which the government forecasts will shrink 3.3 percent this year. Consolidating Oi, Brazil’s largest fixed-line operator, helped increase Portugal Telecom’s fourth quarter sales by 82 percent to 1.73 billion euros, the company said.
The Portuguese phone operator said separately that its board approved a dividend of 65 euro cents a share.
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