Orange (ORAN) Beats Q2 Revenues, EBITDA Increases Y/Y

Orange S.A. (NYSE:ORAN) recorded revenues of approximately $11,371 million in the second quarter of 2016, up 1.9% year over year. Revenues also outpaced the Zacks Consensus Estimate of $11,266 million.

Segment-wise, Mobile Services revenues totaled approximately $4,835.3 million, down 0.1% year over year. Enterprise & International carrier and Shared services revenues came in at $2,052.9 million, down 0.9%. Fixed services revenues were $3,805.4 million, up 0.7%. Mobile Equipment sales reached $467.5 million, up 6.1% and Other revenues totaled $211.2 million, down 12.3%.

Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) increased 2.3% year over year to approximately $3,776.1 million. Quarterly EBITDA margin was 33.2% compared with 33.1% in the prior-year quarter. In the reported quarter, capital expenditure was around $1,931 million, up 5.7% year over year.

Revenues by Key Markets

In the reported quarter, revenues in France, the operator’s largest market, fell 1.7% year over year to approximately $5,290.3 million. Revenues in Spain were up 6.2% year over year to around $1,387.8 million. Revenues in Poland totaled around $749.8 million, down 3.5%. Revenues from Belgium & Luxembourg were $337.6 million, down 1.6% year over year while the same from Central Europe increased 1.5% to approximately $455 million.

In Africa and the Middle East, revenues grew 2.3% to $1,405.9 million. Revenues from International Carriers and Shared Services decreased 3.5% year over year to approximately $508.1 million. In the Enterprise segment, revenues increased 0.3% year over year to around $1,812.4 million.

Subscriber Trends

As of Jun 30, 2016, Orange had 249.55 million subscribers (excluding MVNOs) across its operating territories, up 0.5% from the year-ago quarter. The mobile customer base (excluding MVNOs) dropped 0.7% to 188.562 million. MVNO subscriber base in Europe was 4.306 million, down a substantial 32.2% year over year. Subscribers of broadband services increased 10.4% to 17.89 million. IPTV and satellite TV customers rose 9.6% to 8.146 million. VoIP customers totaled 13.904 million, up 19.4%. IP VPN access lines for enterprise customers were 0.351 million, up 0.6% year over year.

Zacks Rank & Stocks to Consider

Orange carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the non-U.S. telecom industry include NTT DOCOMO Inc. (NYSE:DCM) , KT Corp. (NYSE:KT) and Nippon Telegraph and Telephone Corp. (NYSE:NTT) . All three stocks currently sport a Zacks Rank #1 (Strong Buy).