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Telefonica Czech Drops From 2-Week High on Net Income

Nov. 6 (Bloomberg) -- Telefonica Czech Republic AS fell from a two-week high after the country’s biggest phone company said its third-quarter profit shrank more than analysts had expected.

The shares of the Czech unit of Telefonica SA retreated 0.5 percent to 388 koruna by the close in Prague, snapping a two-day gain. The PX equity index rose 0.7 percent.

Net income fell to 1.76 billion koruna ($89 million) in the three months to September from 2.21 billion koruna a year earlier as clients spent less on calls, the company said today. That missed the average 1.83 billion-koruna estimate of eight analysts surveyed by Bloomberg. Revenue shrank 4 percent to 12.6 billion koruna.

“We are getting more and more cautious” because “both revenues and profitability are on the slide,” Attila Gyurcsik, an analyst at Concorde Ertekpapir Zrt. in Budapest, wrote in a report today. “The sustainability of the ordinary 40 koruna-per-share dividend is in question in the next couple of years.”

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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