Saudi Telecom net income drops 27.1%

Saudi Telecom Co. (STC) missed estimates as it reported a 27.1 percent fall in second-quarter profit on Tuesday, extending an earnings slump as operating expenses rose.
STC had reported falling profits in six of the preceding seven quarters, stalling an improvement in its bottom line that had been sparked by the operator trimming its international ambitions and refocusing on its lucrative home market.
That slump continued in the second quarter as the former monopoly made a net profit of SR1.87 billion ($499 million) in the three months to June 30, compared with a profit of SR2.56 billion in the prior-year period, according to a bourse statement.
Four analysts polled by Reuters had on average forecast STC, which owns stakes in operators in the Gulf, Turkey and Asia, would make a quarterly profit of SR2.37 billion.
Explaining the poorer performance, it cited a SR563 million increase in operating expenses as sales and marketing costs, as well as general and administrative expenses, rose. Depreciation and amortization costs also rose.
Profits were also dragged down by the company booking SR278 million in losses from investments, compared with gains of 7 million the previous year.

Source: Arab News