Swisscom Q3 net income misses estimates as revenue beats forecasts

Investing.com -- Swisscom's third-quarter earnings fell short of analyst expectations as weaker profitability in its Swiss telecommunications business and higher depreciation costs weighed on results, although group revenue exceeded forecasts.

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Net income for the three months ended September fell 5.8% to CHF342 million from CHF363 million a year earlier, missing the analyst consensus of CHF358 million. Revenue declined 0.4% to CHF3.715 billion from CHF3.73 billion, but exceeded the consensus estimate of CHF3.663 billion.

EBITDA after lease expense (EBITDAaL), the group's measure of operating performance, fell 2% to CHF1.276 billion, below analysts' CHF1.291 billion estimate. Operating income edged up 0.1% for the first nine months, but in the third quarter alone it declined 9.6% to CHF487 million from CHF539 million. Earnings per share fell to CHF6.61 from CHF7.01.

Swisscom's Switzerland segment recorded a 0.6% decline in nine-month revenue to CHF5.83 billion, while EBITDAaL fell 1.3% to CHF2.53 billion. Lower telecommunications service revenue continued to weigh on the business, with broadband connections declining 2.4% and TV connections falling 2.7%.

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In Italy, revenue fell 2.2% in euro terms to EUR5.26 billion, reflecting continued pressure from competition and a declining customer base. However, EBITDAaL increased 10.1% to EUR1.37 billion as operating expenses fell 5.9%, supported by EUR265 million in synergy savings from the integration of Vodafone Italia.

Swisscom maintained its full-year 2026 guidance, expecting revenue of CHF14.7 billion to CHF14.9 billion and EBITDAaL of CHF5 billion to CHF5.1 billion.

It now expects operating free cash flow to exceed CHF2 billion, compared with its previous forecast of around CHF2 billion.

The company also confirmed plans to propose a dividend increase to CHF27 per share for 2026, up from CHF26.

"Simplification and ongoing efficiency improvements are the key to stabilising our Swiss business," Swisscom CFO Eugen Stermetz said.

Original Article

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