Swiss telecoms provider Swisscom reports 7.5 percent drop in second-quarter net profit

Swisscom reports 7.5 pct drop in Q2 net profit

BERN, Switzerland — Telecommunications provider Swisscom AG reported a 7.5 percent drop in second-quarter net profit Wednesday in part due to the weakening euro’s effect on revenues at its Italian broadband unit Fastweb.

Net income fell to 496 million Swiss francs ($476 million) compared to 536 million during the same quarter of 2009. Earnings per share fell 7 percent to 9.52 francs.

The former Swiss telecoms monopolist, which is still majority-owned by the government, said revenues in its home market rose 0.9 percent to 2.13 billion francs during the quarter.

But sales at Fastweb fell 8.3 percent to 659 million francs, partly as a result of the euro’s sharp drop against the Swiss currency during the past months.

Overall revenues declined 0.3 percent to 2.99 billion in the quarter ending June 30.

Swisscom said deductions made for the loss of value of its assets also affected bottom line results, which were slightly below analysts’ expectations.

Analysts at Zuercher Kantonalbank, however, noted the company’s continued strong performance in Switzerland, where it dominates the fixed line, mobile and broadband markets, and has recently seen a surge in demand for its Internet TV products.

Shares in Swisscom closed 0.6 percent lower at 392.90 francs on the Zurich exchange.