Chunghwa Telecom Co. Ltd. CHT declared strong financial results in the first quarter of 2015. Quarterly total revenue came in at approximately $1,790 million, up 2.6% year over year. The first-quarter 2015 net income came in at around $331.3 million, up 2% year over year. Net earnings per ADR were 44 cents as against 43 cents in the year-ago quarter.
Quarterly operating income stood at $373.4 million, down 0.9% year over year. Quarterly operating costs were $1,415.7 million, up 3.5% year over year. Operating margin was 20.9% compared with 21.6% in the year-ago quarter.
The first-quarter 2015 EBITDA was $644.8 million, up 0.4% year over year. Quarterly EBITDA margin came in at 36% against 36.8% in the prior-year quarter. During the reported quarter, Chunghwa generated around $373.7 million of cash from operations, up 22.6% year over year. Capital expenditure was around $175.3 million, down 4.1% year over year.
Segment wise Revenues
The Mobile Communications segment accounted for approximately $887.6 million of the total first-quarter 2015 revenue, up 1.8% year over year. The Internet segment contributed around $197.2 million, up 1.4% year over year. The Domestic Fixed-line Communications segment recorded $556 million in revenues, up 2.3% year over year. The International Fixed-line Communications segment generated $128.7 million, up 6.9% year over year. Other Business registered the remaining $21 million, up 43.7% year over year.
In the first quarter of 2015, Handset sales revenues stood at $255.6 million, down 4.3% year over year. Mobile VAS (value added services) revenues were $303.7 million, up 19% year over year, wherein mobile Internet VAS (largest contributor) revenues were up 26.4% year over year.
Subscriber Statistics as of Mar 31, 2015
The total Broadband subscriber base was nearly 4.53 million, out of which the FTTx subscriber base was around 3.18 million, accounting for 70.2% of the total broadband subscriber base. 936,000 Broadband subscribers signed up for 100 Mbps or higher speed connections, up a whopping 90.2% year over year. HiNet subscriber base totaled 3.79 million, up 0.1% year over year.
Mobile subscriber base stood at 11.22 million, up 4% year over year. Mobile Internet subscriber base was 5.35 million. Chunghwa currently commands 24.8% of the mobile Internet market in Taiwan. The International /Domestic Fixed-line subscriber base stood at 11.32 million.
Guidance
For fiscal 2015, the company expects total revenue to increase 2% year-over-year to NT$231.09 billion. Operating costs are expected to increase 1.9% compared with the prior year period. Income from operations is expected to be NT$45.05 billion. Non-operating income is estimated at NT$0.87 billion. Income before income tax and net income are expected to be NT$45.92 billion and NT$37.50 billion, respectively. Earnings per share are expected to be NT$4.83. Capital expenditure is expected to decline 5.7% year over year.
Other Stocks to Consider
Currently, Chunghwa carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space are Verizon Communications Inc. VZ Level 3 Communications Inc. LVLT and Vonage Holdings Corp. VG. All three stocks carry a Zacks Rank #2 (Buy).
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