Telekom Austria Has Wider-Than-Expected Loss on Job-Cut Cost

May 11, 2011, 5:18 AM EDT By Jonathan Tirone

(Updates with CFO’s comments in third paragraph.)

May 11 (Bloomberg) -- Telekom Austria AG, the country’s biggest phone network, had a wider-than-estimated first-quarter loss after the company booked 184.1 million euros ($113.4 million) in one-time expenses to cut more than 500 workers.

The net loss was 79.2 million euros compared with profit of 91.2 million euros a year earlier, the Vienna-based company said today in a statement. That exceeded the 53.1 million-euro average loss estimate of five analysts surveyed by Bloomberg. Sales declined 0.7 percent to 1.12 billion euros, compared with the 1.11 billion-euro estimate of 12 analysts.

“Over the next years, personnel-related costs will be reduced,” Chief Financial Officer Hans Tschuden said in a separate statement. Spending related to workforce reductions in years to come will be reflected in quarterly results.

The former Austrian phone monopoly runs mobile networks in seven eastern European countries and has been trying in its home market to staunch fixed-line losses and drop long-time workers to boost profitability. Telekom Austria bid 1.1 billion euros on May 4 to buy Serbia’s state telephone company, an offer that the Balkan nation’s government rejected as inadequate.

Telekom Austria reiterated that 2011 earnings before interest, tax, depreciation and amortization will total as much as 1.6 billion euros. The company is targeting sales of up to 4.6 billion euros.

--Editors: Tom Lavell, Zoe Schneeweiss

To contact the reporter on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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