TPSA net income declines less than analysts estimated

Shares of TPSA rose to a two-month high after Poland's largest phone company said second-quarter profit fell by a less-than-estimated 13 percent.

TPSA gained as much as 3.9 percent to 15.85 zloty in Warsaw, the highest level since May 27, outstripping the 0.6 percent gain in the benchmark WIG20 Index. The shares traded up 2.6 percent as of 9:52 a.m.

The company "surprised on the positive" side "all across the mobile segment," posting "very strong" growth in the number of subscribers from the first quarter, and "decent" sales, Pawel Puchalski, an analyst at Bank Zachodni WBK SA in Warsaw, wrote in a note.

Net income fell to 325 million zloty ($105.5 million) from 374 million zloty a year earlier, the Warsaw-based unit of France Telecom SA said in a statement today. That compares with the 287.3 million-zloty mean estimate in a Bloomberg survey of 10 analysts.

TPSA's revenue has been pushed down by reductions in regulated prices. Sales fell 4.7 percent to 3.99 billion zloty, beating a mean estimate of 7.9 percent, and a 10 percent drop in the first quarter, thanks to better than estimated mobile-phone performance.

The pace of the decline in sales will slow to less than 4 percent in the second half, the company said. TPSA also increased its forecast for 2010 free cash flow to at least 2.3 billion zloty from at least 2 billion zloty.

Earnings before interest, taxes, depreciation and amortization, or Ebitda, will probably be 36 percent to 37 percent of sales in the second half, compared with 37 percent in the second quarter, TPSA added.

Source:  Bloomberg