Swisscom Earnings, Sales Top Estimates as Competition Mounts

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Swisscom AG, Switzerland’s largest phone company, reported first-quarter earnings and sales that topped analysts’ estimates as its fixed-network business continued to grow.

Earnings before interest, taxes, depreciation and amortization declined 0.9 percent to 1.05 billion francs ($1.14 billion), Bern-based Swisscom said in a statement Wednesday. Analysts predicted earnings of 1.03 billion francs, according to the average of estimates compiled by Bloomberg. Sales advanced 2.6 percent to 2.89 billion francs, compared with the 2.79 billion-franc estimate.

Competition is increasing in Switzerland after Xavier Niel, a billionaire known for sparking a mobile price war in France, agreed to buy third-place carrier Orange Switzerland for 2.8 billion francs in December. The operator has been rebranded Salt in a 40 million-franc effort that’s set to end by September.

“Our business is shaped by sustained high investment coupled with simultaneous price pressure,” Swisscom Chief Executive Officer Urs Schaeppi said in the statement.

The company’s stock gained 0.7 percent at 9:03 a.m. in Zurich to 560 francs. The shares have added 7.1 percent this year -- the fourth-best performing stock in the Swiss Market Index -- giving Swisscom a market value of 29 billion francs.

Franc’s Surge

Swisscom warned in February that its 2015 earnings would trail analysts’ estimates as a surge of the Swiss franc eats away at revenue and profit from its Italian Fastweb SpA unit. The appreciation will reduce annual sales by 400 million francs and Ebitda by 100 million francs, the company said at the time.

Schaeppi has said he’ll consider selling Fastweb if he gets a “fantastic” offer for the unit, which Swisscom bought in 2007 to make up for slowing growth in Switzerland.

The number of fixed and broadband lines grew by 4.1 percent compared with a year earlier to 1.91 million, Swisscom said. Net income at the carrier fell 5.9 percent to 351 million francs, missing the average estimate of 363 million francs.

Swisscom reiterated its forecast of full-year revenue of more than 11.4 billion francs and Ebitda of about 4.2 billion francs.

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