Deutsche Telekom raises buyback plan and lifts free-cash-flow guidance

Second-quarter revenue reaches 29.93 billion euros as net profit declines

Deutsche Telekom now expects free cash flow after leases of around 20.0 billion euros, compared with more than 19.8 billion euros previously. The company had raised its guidance in May to more than 19.8 billion euros from around 19.8 billion euros.

Deutsche Telekom said the latest increase reflects revised guidance from T-Mobile US. The change was mainly driven by higher-than-expected net cash, according to the company.

The share buyback plan could reach up to 5 billion euros by the end of the year, Deutsche Telekom said, compared with 2 billion euros previously. The company said the program would help support its share price performance.

The company maintained its expectations for adjusted earnings before interest, taxes, depreciation and amortization after leases of around 47.5 billion euros. It also continued to expect adjusted earnings per share of around 2.20 euros.

Second-quarter adjusted earnings before interest, taxes, depreciation and amortization after leases increased to 11.82 billion euros from 11 billion euros. The metric is closely watched in the telecommunications industry.

Revenue rose to 29.93 billion euros from 28.67 billion euros, with growth across Deutsche Telekom’s units in Germany, the United States and Europe. Revenue in Germany rose 3.5% to 6.51 billion euros, helped by the FIFA World Cup. Revenue in the United States increased 5.2%, while revenue in Europe rose 1.5%.

Service revenue increased 4.8% to 25.41 billion euros. Analysts had forecast revenue of 29.955 billion euros and adjusted earnings before interest, taxes, depreciation and amortization after leases of 11.702 billion euros, according to a company-compiled consensus.

Net profit fell to 2.45 billion euros from 2.615 billion euros.