Reliance Communications Quarterly Net Beats Estimates
(Corrects to show profit beat estimates in second paragraph of story published yesterday.)
Reliance Communications Ltd. (RCOM), India’s third-largest mobile-phone company by market value, reported second-quarter profit that beat analysts’ estimates after income other than from operations almost tripled.
Net income jumped more than sixfold to 6.75 billion rupees ($106 million) in the three months ended September from 1.02 billion rupees a year earlier, the Mumbai-based company said in a statement today. That surpassed the 1.18 billion-rupee median of 18 analysts’ estimates compiled by Bloomberg.
The carrier posted its first increase in profit in five quarters after the company wrote back a 4.4 billion-rupee provision it had made earlier for business restructuring. Billionaire Chairman Anil Ambani’s company, which this month began offering Apple Inc.’s latest iPhone on contracts, also benefited from an increase in revenue from voice calls made on its network.
“This is a break for Reliance because no one was expecting positive results,” Harit Shah, an analyst with Nirmal Bang Institutional Equities in Mumbai, said before the earnings announcement. “They are winning quality clients who are spending money on voice and data traffic.”
Revenue from voice services rose 7.8 percent to 33.8 billion rupees, and total data traffic more than doubled, the company said. Average revenue per user was 120 rupees, a 26 percent jump from a year earlier, according to the statement.
Shares of Reliance fell 5.2 percent to 129.20 rupees at the close of Mumbai trading, before the earnings announcement. The stock has climbed 75 percent this year, compared with the 4.4 percent increase in the benchmark S&P BSE Sensex and the biggest local carrier Bharti Airtel Ltd.’s 6.5 percent gain.
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