The results of the first quarter of this year that Telefónica presented yesterday surprised the market as it had not happened for a long time with the company chaired by José María Álvarez-Pallete.

Despite the complicated inflationary environment in which the business has had to move, Telefónica reported profits of 706 million euros, 20.3% lower than the same period of the previous year, but much higher than the 375 million that had Estimated market consensus. "The results show that Telefónica is efficiently managing cost increases," said Iván San Félix, an analyst at Renta 4.

A positive reading that was generalized yesterday in the markets and that raised the stock market price of shares by 2.64% in a trading session dominated by falls in the main markets and with the Ibex 35 losing 1.35%. The main Spanish telecommunications company monopolized many purchase recommendations by the analysis houses.

As well as earnings, Telefónica reported more positive earnings than expected in all markets. In total, between January and March it had a turnover of 9,410 million euros, which, despite being 9% lower than the same period in 2021, were also above the expected 9,067 million. Including the activity from 50% of the subsidiary that Telefónica maintains with Virgin in Great Britain, these revenues rise to 10,883 million euros, 3.2% more than in 2021.

By markets, Brazil is where it achieved the largest revenue growth, 18.1%, followed by Latin America, with 10.9%. In Europe, the German market grew by 5.2%, and that of the United Kingdom, by 4.3%, while in Spain the improvement was 0.9%.

As for gross operating profit, they ended at 3,199 million euros. Financial debt fell by 23%, to 27,453 million euros. Telefónica acknowledges that its maturities are covered until beyond 2024, with a liquidity of 22,302 million, in addition to having more than 80% of the debt at a fixed rate, with an average life of the credits of 12 years.

“The solid start to the year in a scenario of inflationary tensions and geopolitical instability shows the strength of the company to face the most adverse situations. It is confirmed that the strategic plan is correct and represents a valid and robust roadmap to be able to continue providing the best service to our clients”, assured President Álvarez-Pallete.

Bankinter analysts are even more optimistic. "The results place the group in a position to meet, and even slightly exceed, the objectives for the year, and with a dividend yield of 6.4%, the value continues to remain attractive," they say.