Telecom Italia keeps forecast as profits drop 13.4%

Telecom Italia reported a net profit fall of 13.4 percent for the third quarter on Friday to 681 million euros ($867 million), but stood by its forecast for 2012 earnings. The company said it expected underlying earnings before interest, taxes, depreciation and amortisation to remain "substantially in line with" 2011 and was counting on reducing its debt to about 27.5 billion euros. "2012 continues to suffer from recessionary tensions in the domestic market and from an economic slowdown in Latin American countries," said Franco Bernabe, Telecom Italia chairman. The company said sales had been hit by the eurozone debt crisis. The economic outlook was worsening, it said, and the market is "characterized by powerful deflationary forces and tightening regulatory pressures." "In particular, the third quarter was negatively affected by the enforcement of the new 53 percent lower mobile termination rates and by the introduction of new price caps for mobile roaming in Europe," Bernabe said. Telecom Italia shares were up 3.53 percent on the Milan stock market on Friday at around 0945 GMT.