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Telefonica, S.A. (TEF) reported a second-quarter 2025 net income of €155 million, which plummeted 67% year over year. Furthermore, basic earnings per share (EPS) were €0.02 (8 cents) compared with €0.07 a year ago. The bottom line met the Zacks Consensus Estimate.
Quarterly revenues declined 3.7% year over year to €8.95 billion ($10.2 billion) due to adverse foreign exchange rate movements. The top line fell short of the consensus estimate by 8.83%. However, the quarterly revenue figures showed an organic growth of 1.5%, highlighting the company’s operational strength in its core markets. Segment-wise, Telefonica experienced notable gains in B2B, with organic revenue growth of 5.2%, while B2C revenue increased 2.1%.
A major theme in TEF’s 2025 strategy has been reducing exposure to lower-margin Latin American operations under the Hispam portfolio. The Group has already completed the divestitures of Telefonica Argentina and Telefonica del Peru and is progressing with deals in Uruguay, Ecuador and Colombia. These strategic moves not only streamline its footprint but also improve its financial and operational focus on high-value geographies and services.
Telefonica Espana: Quarterly revenues in Spain rose 1.9% year over year to €3.2 billion, driven by strong commercial results and the highest net customer additions since 2018. Retail strength was supported by a larger customer base, price increases and robust IT sales, though growth slowed slightly after a strong fourth quarter in IT. The quarterly adjusted EBITDA increased 1% to €1.12 billion, fueled by higher revenues and efficiency improvements from the March 2024 workforce restructuring and network transformation.
Telefonica Deutschland: Revenue decreased 2.4% to €2 billion, reflecting stronger performance in the core business. However, short-term mobile service revenue (MSR) trends continue to be adversely impacted by challenges related to the ongoing transformation of the partner business. The quarterly adjusted EBITDA margin was 31.3%. Capital expenditure (CapEx) plunged 12.3% to €204 million in the quarter.
VirginMedia-O2 U.K.: Quarterly revenues went down 5.5% to €3 billion. The quarterly adjusted EBITDA margin was 38.2%. CapEx grew 6.6% to €628 million in the quarter.
Telefonica Brasil: Quarterly revenues in Brazil increased 7.1% to €2.3 billion, fueled by strong increases in contract and FTTH revenues, which rose 9.2% and 10.9%, respectively. These two segments now account for 70% of total service revenue. The quarterly adjusted EBITDA jumped 8.6% to €960 million, supported by well-managed operating expenses that grew in line with inflation, despite increased commercial activity and a greater focus on digital services. CapEx increased 4.2% to €381 million in the quarter.
Telefonica SA price-consensus-eps-surprise-chart | Telefonica SA Quote
Telefonica Infra (Telxius): Telxius, Telefonica’s submarine cable unit, saw a 10% year-on-year rise in traffic in the first half. Higher demand led to a 69% increase in bandwidth provisioned, and ongoing cost control helped deliver strong profitability, with an EBITDA margin of 48.9%.
Telefonica Tech: revenues rose 12.5% to €566 million, with improved momentum driven by growth in Spain, especially in the Cloud business, which gained traction in the public sector, finance and healthcare. Cybersecurity, IoT and AI & Data also showed strong performance. Revenues are well-balanced across services, with a strong focus on Managed & Professional services and own platforms. More than 85% comes from hard-currency markets. The outlook for the year stays positive, supported by strong sales and a solid pipeline.
Telefonica Hispam: Revenues fell 2.9% year over year to €1.04 billion, mainly due to Chile (which had one-time legacy network revenues in the prior-year quarter) and weaker B2B results in Colombia. This was partly balanced by strong service revenue growth in Mexico, up 3.5% year over year.
Quarterly adjusted EBITDA was €2.9 billion, up 1.2% year over year. Operating income was €1.03 billion in the quarter under review, which decreased 6.7%.
In the first half of the year, Telefonica generated €4.5 billion of net cash from operating activities compared with €4.6 billion in the year-ago period.
In terms of free cash flow, TEF generated €505 million in the quarter, reversing the seasonal dip seen in the prior-year quarter and closing the half-year with €291 million in FCF.
As of June 25, 2025, the company had €6.5 billion in cash and cash equivalents, with €30.9 billion of non-current financial liabilities.
For 2025, Telefonica continues to expect year-on-year organic growth in revenues, EBITDA and EBITDAaL - CapEx. It aims to keep CapEx as a share of sales below 12.5%, maintain free cash flow at 2024 levels and reduce debt.
The company also reaffirmed its commitment to shareholder returns by confirming a €0.30 per share dividend for 2025, split into two tranches (€0.15 each in December 2025 and June 2026).
Telefonica currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Cognex Corporation (CGNX) came out with quarterly earnings of 25 cents per share, beating the Zacks Consensus Estimate of 23 cents per share. This compares to earnings of 23 cents per share a year ago.
Cognex posted revenues of $249 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.96%. This compares to year-ago revenues of $239 million.
In the past six months, shares of CGNX have lost 13.4%.
Fortive Corporation (FTV) reported second-quarter 2025 adjusted earnings per share (EPS) of 58 cents from continuing operations, which missed the Zacks Consensus Estimate of 60 cents. The bottom line increased 3.6% year over year.
Revenues declined 0.4% year over year to $1.02 billion. The top line beat the Zacks Consensus Estimate by 0.8%. Core revenues decreased 0.7% year over year.
FTV has lost 29.5% in the past year.
Simulations Plus, Inc. (SLP) reported third-quarter fiscal 2025 adjusted earnings of 45 cents per share, which expanded 66.7% year over year. The figure also surpassed the Zacks Consensus Estimate of 26 cents per share.
Quarterly revenues jumped 10% year over year to $20.4 million, driven by continued momentum across its software and services business segments, along with a $2.4 million boost from the Pro-ficiency acquisition.
In the past, shares of SLP have declined 67%.
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This article originally published on Zacks Investment Research (zacks.com).
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