Financial Performance - Total revenues for the first half of 2025 were €18,013 million, a decrease of 3.3% compared to €18,634 million in the same period of 2024[14] - Operating income for the first half of 2025 was €2,109 million, down 4.5% from €2,208 million in the first half of 2024[14] - Profit for the period was a loss of €1,286 million, compared to a profit of €1,044 million in the same period of 2024[17] - Basic and diluted earnings per share attributable to equity holders of the parent were €(0.26), down from €0.14 in the first half of 2024[14] - EBITDA for the first half of 2025 was reported at 5,895 million euros, down from 6,151 million euros in the first half of 2024[59] - EBITDAaL for the first half of 2025 was 4,611 million euros, compared to 4,889 million euros in the same period of 2024[59] - The Group reported a profit for the period of (1,286) million euros, compared to a profit of 1,044 million euros in the same period of 2024[59] - Operating income fell to €333 million, down 36% from €521 million year-over-year[92] - The result for the period attributable to equity holders of the parent was a loss of €430 million, compared to a profit of €34 million in the first half of 2024[92] Assets and Liabilities - Non-current assets decreased to €73,108 million as of June 30, 2025, from €78,133 million at the end of 2024, representing a decline of 6.4%[12] - Total assets decreased to €94,369 million as of June 30, 2025, down from €100,502 million at the end of 2024, a reduction of 6.1%[12] - Equity attributable to equity holders of the parent decreased to €17,283 million as of June 30, 2025, from €19,347 million at the end of 2024, a decline of 10.7%[12] - Current liabilities remained relatively stable at €25,125 million as of June 30, 2025, compared to €25,734 million at the end of 2024[12] - The total carrying amount of financial assets as of June 30, 2025, was €20,366 million, compared to €22,765 million on December 31, 2024, showing a decline of approximately 10%[195] Cash Flow and Investments - Cash flow from operating activities was €4,445 million, a decrease from €4,666 million in the same period of 2024[27] - Net cash used in investing activities was €3,712 million, compared to €4,115 million in the first half of 2024[27] - The net increase in cash and cash equivalents during the period was a decrease of €1,557 million, compared to a decrease of €1,847 million in the first half of 2024[27] - The free cash flow from continuing operations for the first half of 2025 was €291 million, a decrease of 42.5% compared to €506 million in the same period of 2024[74] - As of June 30, 2025, cash and cash equivalents stood at €6,505 million, reflecting a decrease from €8,062 million at the end of 2024[195] Discontinued Operations and Sales - The company reported a significant loss from discontinued operations amounting to €1,913 million in the first half of 2025[14] - The sale of Telefónica Móviles Argentina generated €1,189 million, with a resulting loss of €79 million from the transaction[39] - The sale of Telefónica del Perú was completed for approximately €900,000, recycling negative translation differences of €222 million into 2025 results[44] - As of June 30, 2025, the results of Telefónica del Perú are classified as discontinued operations, impacting the overall financial results[49] Shareholder Equity and Dividends - Dividends paid amounted to €931 million, slightly down from €972 million in the previous year[27] - The share capital was reduced by €80,296,591 through the cancellation of own shares, resulting in a new share capital of €5,670,161,554[200] - The share premium was reduced by €230 million in relation to the capital reduction[200] Financial Ratios and Metrics - The average exchange rate for the Brazilian real decreased by 12.7% compared to the first half of 2024[38] - The Group's equity attributable to shareholders was negatively impacted by €529 million due to translation differences in the first half of 2025[38] - The net financial debt as of June 30, 2025, is calculated based on current and non-current financial liabilities, excluding cash and cash equivalents[63][68] - As of June 30, 2025, the net financial debt stood at €27,609 million, an increase from €27,161 million at the end of 2024, reflecting a rise of 1.65%[70] Impairments and Write-offs - The impairment of trade receivables increased from €106 million in December 2024 to €122 million in June 2025, reflecting a rise of 15.1%[189] - The company reported an impact of impairment of trade receivables in the consolidated income statement of €271 million for the first half of 2025, down from €302 million in the same period of 2024[191] - The Group recorded impairments in goodwill for cash-generating units in Peru, Chile, Telefónica Tech UK & Ireland, and BE-terna as of December 31, 2024[113] Strategic Initiatives - The Group's strategy includes gradually reducing exposure in Hispanoamerica, as evidenced by the classification of several subsidiaries as disposal groups held for sale[49] - VMO2 entered into a joint venture with Daisy Group to merge their B2B businesses, with VMO2 expected to own 70% of the new entity[135][136] - Telefónica Brasil signed an agreement to acquire the remaining 50% of Fibrasil for €133 million, increasing its stake to 75.01%[140]

Financial Data and Key Metrics Changes - Revenue reached almost EUR 9 billion in the quarter, growing 1.5% organically [14] - EBITDA was nearly EUR 3 billion, up 1.2% [14] - Free cash flow turned positive to EUR 5 million in the second quarter, an improvement of EUR 718 million versus Q1 [14] - Net financial debt decreased 5.5% year on year to EUR 27.6 billion as of June [15] - Earnings per share from continued operations amounted to EUR 0.07 in the second quarter [15] Business Line Data and Key Metrics Changes - In Spain, the company achieved its best Q2 net adds since Q3 2018, with a convergence churn rate of 0.8%, the lowest in over 11 years [23][24] - Brazil saw a 6% increase in contract accesses and a 42% increase in revenue from cloud services [30] - Telefonica Deutschland reported a decline in EBITDA by 6% year on year, primarily due to the migration of the one on one customer base [34] Market Data and Key Metrics Changes - Spain and Brazil together represent 70% of group EBITDA, showing improving trends this quarter [15] - The UK market remained competitive, with Virgin Media O2 focusing on customer loyalty and protecting value [36] - In Germany, the mobile service revenue declined year on year, reflecting the impact of the one on one customer migration [34] Company Strategy and Development Direction - The company is focused on customer-centric strategies, operational excellence, and creating value under strict financial discipline [8] - Strategic choices are aimed at strengthening the competitive position in the European telecom industry [8] - The company is concentrating resources in select markets where it has competitive advantages, as evidenced by the sales of operations in Argentina, Peru, and other Latin American countries [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing transformation at Telefonica, which is expected to create value for shareholders [8] - The company reiterated its full-year 2025 guidance across metrics, expecting revenue and EBITDA to continue growing [17] - Management acknowledged the variable macro environment but emphasized the focus on managing controllable factors [8] Other Important Information - The completion of the copper shutdown in Spain marks a significant milestone, freeing up resources for other endeavors [10] - The company aims to achieve a simplified organization that can move faster and compete more effectively [13] - Telefonica has been recognized for its sustainability efforts, being named the second most sustainable company in the world by Time Magazine [46] Q&A Session Summary Question: Expectations for growth in Spain and the UK - Management aims for revenue growth in Spain to exceed 2024 levels, driven by improved customer experience and B2B momentum [53] - In the UK, management acknowledged the competitive market and emphasized ongoing efforts to manage retention and prevent churn [68] Question: Strategic review and balance sheet considerations - Management stated that leverage is relevant but not strategically limiting, emphasizing the importance of maintaining investment-grade ratings [79] - The company is looking to take calculated risks to achieve larger economies of scale [81] Question: Cybersecurity and technology investments - Management highlighted the changing conditions in the cybersecurity market driven by European political will and defense investments [65] - The company is exploring opportunities in technology but does not see a need for significant CapEx in cybersecurity at this time [106] Question: Updates on fiber path stake sale and infrastructure ownership - The fiber path sale process is ongoing and not part of the strategic review [106] - Management believes that owning core infrastructure is essential for operational efficiency and service offerings [115]

Financial Data and Key Metrics Changes - Revenue reached almost EUR 9 billion in Q2 2025, growing 1.5% organically, while EBITDA was nearly EUR 3 billion, up 1.2% [14][15] - Free cash flow turned positive at EUR 5 million in Q2, an improvement of EUR 718 million compared to Q1, with a total of EUR 291 million in the first half [14][44] - Net financial debt decreased by 5.5% year on year to EUR 27.6 billion as of June [15] Business Line Data and Key Metrics Changes - In Spain, the company achieved its best Q2 net adds since Q3 2018, with a convergence churn rate of 0.8%, the lowest in over eleven years [16][23] - Brazil reported a 6% increase in contract accesses and a 42% increase in revenue from cloud services, with overall revenue growth of 7% [28][29] - Germany faced challenges due to the B2B transformation, but maintained solid consumer momentum with stable contract churn at 0.9% [32] Market Data and Key Metrics Changes - Spain and Brazil together represent 70% of group EBITDA, showing improving trends in Q2 [15] - The UK market remained competitive, with O2 contract churn improving to 1% [35] - The Hispan region posted positive contract net adds for the second consecutive quarter, driven by improved network quality in Colombia [39] Company Strategy and Development Direction - The company is focused on customer-centric strategies, operational excellence, and creating value through disciplined financial management, prioritizing Europe and Brazil [8][10] - A strategic review is underway, with plans to unveil conclusions in the second half of the year [8][48] - The company aims to simplify its organization and concentrate resources in select markets where it has competitive advantages [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing transformation at Telefonica, which is expected to create shareholder value and strengthen competitive positioning [8][10] - The company reiterated its full-year 2025 guidance across metrics, expecting revenue and EBITDA to continue growing [17][18] - Management acknowledged foreign exchange headwinds but remains optimistic about free cash flow improvement in the second half of the year [14][18] Other Important Information - The completion of the copper shutdown in Spain marks a significant milestone, allowing for resource reallocation [10][11] - The company has been recognized for its sustainability efforts, being named the second most sustainable company in the world by Time Magazine [46][47] Q&A Session Summary Question: Expectations for growth in Spain and the UK - Management aims for revenue growth in Spain to exceed 2024 levels, driven by improved customer experience and B2B momentum [51][53] - In the UK, management noted various opportunities but could not disclose specifics regarding M&A plans [55] Question: Cybersecurity and tech investments - Management highlighted the changing landscape for cybersecurity in Europe, driven by political will and defense investments [60][64] - The company sees potential in capturing opportunities in cybersecurity due to its experience in integrating and managing such products [66] Question: EBITDA outlook for Germany - Management indicated that the migration of the one on one customer base is a two-year journey, with expectations for EBITDA stabilization and growth thereafter [112][117] Question: Infrastructure ownership - Management emphasized the importance of owning core infrastructure for operational efficiency and service offerings [118]

Financial Performance - Telefónica Group reported H1 2025 revenue of €18013 million, a decrease of 3.3% year-over-year, but an organic growth of 1.5%[20] - Service revenue reached €16263 million, down 3.3% year-over-year, with an organic increase of 1.6%[20] - The company's H1 2025 EBITDA was €5867 million, a 4.6% decrease year-over-year, but an organic growth of 0.8%[20] - Net Financial Debt stood at €27609 million, a decrease of 5.5%[20] - Free Cash Flow (FCF) from continuing operations was €291 million, a decrease of 42.4%[20] Strategic Initiatives - Telefónica is on track with its strategic review for H2 2025, focusing on customers, infrastructure advantages, industrial rationalization, and financial flexibility[13, 97] - The company is accelerating portfolio transformation in Hispam, with the sale of T Argentina for €12 billion and binding agreements for T Colombia (~€368 million), T Uruguay (FV ~€389 million), and T Ecuador (FV ~€330 million)[16, 17, 19] Operational Highlights - Spain experienced improved EBITDAaL-CapEx (+2.8%, +0.8% quarter-over-quarter) and consistent service revenue growth (+1.0%) and EBITDA growth (+1.0%)[22] - Brazil showed record EBITDA growth (+8.6%) since Q4 2023 and a robust EBITDAaL-CapEx margin (16.3%, +1.0 percentage points)[22] - Germany is focused on mitigating the impact of 1&1 migration, with commercial momentum and B2P transformation, achieving an H1 EBITDAaL-CapEx margin of 12.0% (+0.1 percentage points)[22] Guidance and Sustainability - The company reaffirmed its 2025 guidance, expecting organic revenue growth, organic EBITDA growth, organic EBITDAaL-CapEx growth, CapEx/Sales less than 12.5% organic, and FCF similar to 2024[25] - Telefónica Tech's revenue for H1 2025 was €1074 million, with an organic growth of 9.6%[78] - Telefónica Infra has 29.1 million FTTH JV premises passed, representing 35% of Telefónica's FTTH footprint[81]

Group 1 - NiSource (NI) is currently outperforming its peers in the Utilities sector, with a year-to-date return of approximately 14%, compared to the sector average of 11.2% [4][5] - NiSource holds a Zacks Rank of 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3][5] - The Zacks Consensus Estimate for NiSource's full-year earnings has increased by 0.1% over the past quarter, reflecting improving analyst sentiment [3] Group 2 - The Utilities sector consists of 108 individual stocks and currently has a Zacks Sector Rank of 1, indicating strong overall performance [2] - NiSource is part of the Utility - Electric Power industry, which includes 59 stocks and is ranked 74 in the Zacks Industry Rank, with stocks in this group gaining about 11.2% year-to-date [5] - Another outperforming stock in the Utilities sector is Telefonica (TEF), which has returned 34.3% year-to-date and also holds a Zacks Rank of 2 (Buy) [4][6]

Core Viewpoint - The article compares Telefonica (TEF) and Telus (TU) to determine which stock is more attractive to value investors, highlighting TEF's stronger earnings outlook and better valuation metrics [1][3]. Valuation Metrics - TEF has a forward P/E ratio of 14.22, while TU has a forward P/E of 21.25, indicating that TEF is potentially undervalued compared to TU [5]. - TEF's PEG ratio is 0.83, suggesting a favorable valuation in relation to its expected earnings growth, whereas TU's PEG ratio is significantly higher at 5.05 [5]. - TEF's P/B ratio stands at 1.2, compared to TU's P/B of 2.08, further indicating TEF's relative undervaluation [6]. Earnings Outlook - TEF is noted for having an improving earnings outlook, which contributes to its higher Zacks Rank of 2 (Buy), compared to TU's Zacks Rank of 3 (Hold) [3][7].

Core Insights - Investors are evaluating Telefonica (TEF) and Telus (TU) for potential value opportunities in the Diversified Communication Services sector [1] Valuation Metrics - Telefonica has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Telus has a Zacks Rank of 3 (Hold) [3] - TEF's forward P/E ratio is 13.39, significantly lower than TU's forward P/E of 21.68, suggesting TEF may be undervalued [5] - TEF has a PEG ratio of 0.78, while TU's PEG ratio is 5.15, indicating TEF's expected earnings growth is more favorable [5] - TEF's P/B ratio is 1.20 compared to TU's P/B of 2.12, further supporting TEF's valuation advantage [6] - Based on these metrics, TEF holds a Value grade of A, while TU has a Value grade of C, making TEF the more attractive option for value investors [6]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Telefonica (TEF) currently holding a Momentum Style Score of B [2] - Style Scores complement the Zacks Rank, which has a strong track record of outperformance; TEF has a Zacks Rank of 2 (Buy) [3] Group 2: Performance Metrics - TEF shares have increased by 2.12% over the past week, outperforming the Zacks Diversified Communication Services industry, which rose by 0.47% [5] - Over the last three months, TEF shares have risen by 14.84%, and by 12.9% over the past year, compared to the S&P 500's increases of 1.99% and 12.34%, respectively [6] - The average 20-day trading volume for TEF is 635,540 shares, indicating a bullish sign if the stock is rising with above-average volume [7] Group 3: Earnings Outlook - In the past two months, two earnings estimates for TEF have increased, while none have decreased, raising the consensus estimate from $0.33 to $0.40 [9] - For the next fiscal year, two estimates have also moved upwards with no downward revisions during the same period [9] Group 4: Conclusion - Considering all elements, TEF is rated as a 2 (Buy) stock with a Momentum Score of B, making it a potential pick for near-term gains [11]

Company Overview - Telefonica, S.A. is based in Madrid, Spain, and provides mobile and fixed communication services in Europe and Latin America [11] - The company has invested heavily in network deployment and transformation to enhance connectivity in terms of capacity, speed, coverage, and security [11] Investment Ratings - Telefonica is rated as 2 (Buy) on the Zacks Rank, with a VGM Score of A, indicating strong potential for investment [11] - The company has a Momentum Style Score of B, with shares increasing by 7.4% over the past four weeks [12] Earnings Estimates - For fiscal 2025, two analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.07 to $0.40 per share [12] - Telefonica boasts an average earnings surprise of 18.3%, suggesting a positive trend in earnings performance [12]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores provide a framework for evaluating stocks based on value, growth, and momentum [2] Zacks Style Scores Overview - Stocks are rated from A to F based on their value, growth, and momentum characteristics, with A being the highest score [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - Concentrates on a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - Targets stocks with upward or downward price trends, utilizing short-term price changes and earnings estimate adjustments [5] VGM Score - Combines all three Style Scores to provide a comprehensive evaluation of stocks based on value, growth, and momentum [6] Zacks Rank Integration - The Zacks Rank uses earnings estimate revisions to guide investors in stock selection, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988 [7][8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal performance [9] Company Spotlight: Telefonica (TEF) - Telefonica, S.A. is a telecommunications provider in Europe and Latin America, currently rated 2 (Buy) on the Zacks Rank with a VGM Score of A [11] - The company has a Momentum Style Score of B, with shares increasing by 2.6% over the past four weeks [12] - Recent upward revisions in earnings estimates have led to a Zacks Consensus Estimate increase of $0.07 to $0.40 per share, with an average earnings surprise of 18.3% [12]