(Bloomberg) -- Deutsche Telekom AG raised its 2022 earnings guidance for the year after forecasting accelerating customer additions in the US business and posting better-than-expected revenue growth in its European markets. 

The German telecom giant raised its full-year guidance for earnings -- before interest, taxes, depreciation, amortization after leases -- to 37 billion euros ($38.1 billion) from 36.6 billion euros, the Bonn-based company said in a statement on Thursday.

This marks the second time this year that Deutsche Telekom has raised its guidance. Chief Executive Officer Tim Hoettges is working to take majority control of the T-Mobile US business, which has become the company’s primary growth driver. 

“Deutsche Telekom’s update to full-year Ebitdaal guidance on the back of both US and non-US business shows confidence in the outlook, especially as the growing macroeconomic headwinds have started to impact some of the carriers in Europe,” Bloomberg Intelligence analyst Erhan Gurses said.

During a press conference following the release of Deutsche Telekom’s results, Hoettges said the company was “not exposed to export markets like China or India, not exposed to areas outside the western hemisphere. 

“I believe that -- in these times -- that’s an important stabilizing anchor,” he added. 

Key Insights

  • Deutsche Telekom posted net revenue that rose to 28.2 billion euros in the quarter, compared to the average analyst estimate of 28.3 billion euros.
  • Second-quarter Ebitdaal was 9.89 billion euros. That compared to the average analyst estimate of 9.92 billion euros, according to data compiled by Bloomberg.
  • US revenue was about 18.6 billion euros in the second quarter, just under analysts’ average estimate of 18.9 billion euros. When measured in dollars, sales shrank about 1.1%. Deutsche Telekom attributed the decline to less revenue from leasing phones to mobile customers as it shifts the US business to a new strategy.
  • Sales from the company’s German and European business units were slightly ahead of analysts’ estimates in the quarter at 6.06 billion euros and 2.75 billion euros respectively.
  • Brookfield Asset Management Inc. and DigitalBridge Group Inc. agreed last month to buy a 51% stake in Deutsche Telekom’s German and Austrian business, GD Towers, for 10.7 billion euros in cash.
  • Deutsche Telekom has said it will use the proceeds to pay off debt and increase its stake in T-Mobile US.

Market Reaction

  • Deutsche Telekom shares were down less than 1% to 18.8 euros at 11:27 a.m. in Frankfurt on Thursday. The stock has gained about 15.6% this year.
  • That compares to a 0.9% decline on the Stoxx 600 Telecommunications Index.

Get More

  • Statement
  • Deutsche Telekom Sells Towers to Brookfield, DigitalBridge
  • T-Mobile Tops Subscriber Estimates After Rivals Hit Setbacks
  • Deutsche Telekom Edges Closer to T-Mobile Control After Deal

(Updates with CEO comment in 5th paragraph; share reaction.)

©2022 Bloomberg L.P.