Shares of Orange climbed on Thursday following the company's decision to lift its full-year outlook for earnings before interest, taxes, depreciation and amortization after leases - a key performance metric for telecom operators. Management now expects that metric to increase by more than 3% this year, compared with an earlier target of growth of around 3%.
Orange reported first-quarter revenue of 10.1 billion euros, a 3.5% increase from the same period last year. The company attributed the top-line improvement to robust activity in the Middle East and Africa and solid contributions from its core European operations.
In France, Orange's largest market, quarterly revenue rose by 2.3% to 4.4 billion euros. Subscriber gains were recorded in both fixed and mobile services, with 54,000 new fixed broadband customers and 40,000 additional mobile subscribers added during the quarter. The company continues its programme to decommission its 2G network in France and to phase out legacy copper infrastructure across the country.
Orange Cyberdefense, the group's cybersecurity division that management expects will support future growth, posted a 9.2% increase in revenue for the quarter.
Core earnings after leases rose by 6.6% to 2.60 billion euros, marginally ahead of market expectations of 2.58 billion euros. Quarterly capital expenditure was reported at 1.54 billion euros, a figure that aligned with forecasts.
Taken together, the results and the upward revision to EBITDA after leases underpinned investor optimism on Thursday, leading to a rise in the company's share price. The guidance adjustment reflects management's view of the company's trajectory across its regions and business units based on current quarter results.
Contextual note - The EBITDA after leases metric cited by Orange is widely used by investors to assess telecom operators' operational performance after accounting for lease expenses.