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Orange (ORAN) Misses on Q1 Revenues, EBITDA Drops Y/Y

Orange S.A. ORAN recorded revenues of approximately $11,300 million in the first quarter of 2016, up 0.6% year over year. Quarterly total revenue of $11,300 million lagged the Zacks Consensus Estimate of $11,383 million.

Segment-wise, Mobile Services revenues totaled approximately $4,845 million, up 0.9% year over year. Enterprise & International carrier and Shared services revenues came in at $2,020 million, up 1.4%. Fixed services revenues were $3,777 million, up 0.2%. Mobile Equipment sales reached $455 million, up 2.1% and Other revenues totaled $201 million, down 10.2%.

Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) decreased 1.6% year over year to approximately $2.900 million. Quarterly EBITDA margin of 25.7% declined from 26.2% in the prior-year quarter. In the reported quarter, capital expenditure was around $1,693 million, up 10.4% year over year.

Revenues by Key Markets

In the reported quarter, revenues in France, the operator’s largest market, fell 0.7% year over year to approximately $5,296 million. Revenues in Spain were up 1.8% year over year to around $1,342 million. Revenues in Poland totaled around $725 million, down 4.2%. Revenues from Belgium & Luxembourg were $349 million, up 2.3% year over year while the same from Central Europe increased 2.8% to approximately $446 million.

In Africa and the Middle East revenues grew 4.4% to $1,435 million. Revenues from International Carriers and Shared Services increased 3.1% year over year to approximately $512 million. In the Enterprise segment, revenues increased 2.1% year over year to around $1,787 million.

Subscriber Trends

As of Mar 31, 2016, Orange had 252.211 million subscribers (excluding MVNOs) across its operating territories, up 2.1% from the year-ago quarter. The mobile customer base (excluding MVNOs) gained 1.5% to 191.049 million. MVNO subscriber base in Europe was 4.205 million, down a substantial 31.3% year over year. Subscribers of broadband services increased 10.2% to 17.776 million. IPTV and satellite TV customers rose 10.4% to 8.182 million. VoIP customers totaled 13.743 million, up 19.4%. IP VPN access lines for enterprise customers were 0.349 million, flat year over year. 

Zacks Rank & Stocks to Consider

Orange carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the non-U.S. telecom industry include NTT DOCOMO Inc. DCM, KT Corp. KT and Telefonica Brasil SA VIV. All three stocks currently carry a Zacks Rank #1 (Strong Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
KT CORP (KT): Free Stock Analysis Report
 
TELEF BRASIL SA (VIV): Free Stock Analysis Report
 
NTT DOCOMO -ADR (DCM): Free Stock Analysis Report
 
ORANGE-ADR (ORAN): Free Stock Analysis Report
 
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