November 7, 2019 / 6:18 AM / 14 days ago

UPDATE 1-Deutsche Telekom raises earnings guidance, plans 0.60 euro dividend

(Adds detail, CEO quote)

BERLIN, Nov 7 (Reuters) - Deutsche Telekom on Thursday raised its guidance for core earnings this year as it posted solid third-quarter results, saying it planned to pay an annual dividend of 0.60 euros regardless of whether a proposed U.S. merger goes through.

Europe's largest telecoms operator now expects core earnings before interest, taxation, depreciation and amortization after leases (EBITDA AL) of 24.1 billion euros ($26.6 billion). That is up from a forecast of 23.9 billion euros previously.

"Earnings increased in all areas of the group," CEO Tim Hoettges said in a statement. "At the same time we are investing record amounts."

Third-quarter EBITDA AL gained by 5.4% to 6.5 billion euros, narrowly beating expectations in a company poll of analysts, while quarterly revenues topped 20 billion euros for the first time, up 4.8%.

After adjusting for exchange rate effects, the underlying gain in profits was 3% while revenues rose by 1.7%.

Deutsche Telekom has been lifted by the strong performance of U.S. unit T-Mobile, whose proposed takeover of smaller rival Sprint is on hold pending a court hearing on Dec. 9 into a lawsuit brought by several federal states.

The company said it would propose a 2019 dividend of 0.60 euros, regardless of whether the U.S. deal goes through. As a matter of policy, this would be the minimum payout in the years ahead.

This change, flagged to investors last year, seeks to provide longer term clarity after Deutsche Telekom had to bear higher-than-expected costs to acquire spectrum at Germany's recent auction of 5G mobile licences. ($1 = 0.9042 euros) (Reporting by Douglas Busvine Editing by Michelle Martin)

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