Spain's Telefonica plunges into red

Spanish telecoms giant Telefonica posted its first quarterly loss in nine years Thursday on restructuring charges and lower revenues in the country as customers were attracted to cheaper rivals. Europe's largest telephone company by market value said it recorded a loss of 429 million euros ($584 million) in the third quarter compared to a net profit of 5.06 billion euros during the same quarter last year. The third-quarter results last year were inflated by a one-off gain from Telefonica's takeover of Brazilian cell phone company Vivo. The results were roughly in line with the net less of 422 million euros forecast by 11 analysts polled by Dow Jones newswires. In April, Telefonica announced that is was eliminating around 6,500 jobs in Spain, where an unemployment rate of 21.52 percent -- the highest rate in the industrialised world -- has seen consumer demand tumble. At the time, the company said the layoffs would cost it 2.7 billion euros in compensation payments. Total revenues for the third quarter was up 3.7 percent at 15.79 billion euros but sales in Spain fell 8.8 percent to 4.31 billion euros. Telefonica last reported a quarterly loss during the final quarter of 2002.