By Najat Kantouar

Deutsche Telekom raised its full-year guidance for a key earnings metric after reporting higher net profit in the third quarter, citing continued growth momentum on both sides of the Atlantic.

The German telecommunication group now expects adjusted earnings before interest, taxes, depreciation and amortization after leases of around 43 billion euros ($45.43 billion), instead of 42.9 billion euros. The group still expects free cash flow after leases of around 19 billion euros, and adjusted earnings per share to exceed 1.75 euros.

For the third quarter, Deutsche Telekom said net profit climbed to 2.96 billion euros from 1.92 billion euros a year earlier.

Adjusted Ebitdaal--a closely watched profitability metric--increased to 11.10 billion euros from 10.49 billion euros, beating company-compiled consensus of 11.045 billion.

Revenue rose to 28.50 billion euros from 27.56 billion euros, ahead of company-compiled consensus of 28.47 billion euros. Within this, Germany revenue increased 2.5% to 6.465 billion euros, driven by sustained customer growth. U.S. revenue rose 3.7% to 18.29 billion, while Europe revenue grew 3.9% to 3.11 billion euros.

Service revenue--a key metric for the industry--grew 3.7% to 24.13 billion euros from 23.26 billion euros.

In early morning European trading, shares were up 0.79 euros, or 2.8%, at 28.64 euros. Year-to-date, shares have risen 32%.

The group's third-quarter results were in line with the plans recently outlined at its capital market day, it said. The company expects to deliver faster growth in revenue and earnings through 2027, helped by artificial intelligence.

As a result, it expects 15 billion euros in available funds by 2027. The company aims to use this surplus to either increase its stake in T-Mobile US or launch fresh buybacks, on top of a program of 2 billion euros it will carry out next year, as well as dividend payments and investments.

Deutsche Telekom has been seeking to bolster its exposure to the U.S., a bet that helped it become Europe's largest telecoms company with a market value that rose about 63% since the last time it provided mid-term targets in May 2021 to some 133 billion euros.

Write to Najat Kantouar at najat.kantouar@wsj.com

(END) Dow Jones Newswires

November 14, 2024 04:27 ET (09:27 GMT)

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