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Deutsche Telekom cuts 2007 outlook, citing competition and exchange rates

Deutsche Telekom cuts 2007 outlook, citing competition and exchange rates

Deutsche Telekom AG on Sunday issued a profit warning for this year, cutting its earnings outlook due to "extremely tough" competition and the impact of a strong euro.
The Bonn-based company said it now expects 2007 adjusted earnings before interest, taxes, depreciation and amortization of euro19 billion (US$24.6 billion) _ down from a previous forecast of euro19.7-20.2 billion (US$25.5-US$26.1 billion).
Deutsche Telekom said its T-Com fixed-line business would play an "active role in the expected continued tough pricing competition" this year, with "significantly increased expenditures for service and marketing."
As a result, it said, pretax earnings in the broadband and fixed-line business will be euro800 million (US$1 billion) lower than previously estimated.
The company said that recent foreign exchange developments have had a negative impact on revenue and earnings for its mobile business. That prompted it to cut euro200 million (US$258 million) from the business's pretax earnings outlook.
Strong price pressure in the German mobile market and additional marketing expenses resulted in another euro200 million (US$258 million) being cut from the forecast, Deutsche Telekom said.


Updated : 2021-07-26 13:46 GMT+08:00