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Deutsche Telekom cuts 2009 guidance, shares slide

Deutsche Telekom cut its 2009 earnings outlook, now expecting weak markets and tough competition in major markets to push core profit down as much as 4%.

It now saw adjusted 2009 earnings before interest, tax, depreciation and amortization (EBITDA) falling 2%-4 % from the €19.5 billion ($25.17 billion) it made last year, the German telecoms group said in a statement.

First-quarter adjusted EBITDA rose around 3% to €4.8 billion, it said, forecasting 2009 free cash flow of around €6.4 billion.

Deutsche Telekom, Europe's biggest telecoms company by sales, in February tweaked its 2009 guidance higher, forecasting 2009 core profit of around €19.5 billion and a free cash flow of around €7 billion, at the upper range of the preliminary outlook it gave in November.

The move signals that the telecommunication sector - long believed to be a safe haven for investors in times of crisis - has not remained unscathed by the global downturn that has thrown some of the world's biggest economies into recession.

Deutsche Telekom competes with British Vodafone, Spain's Telefonica, France Telecom and Telecom Italia. (Reuters)