Telefónica (NYSE:TEF), the Spanish telecom giant, reported a Q1 2025 net loss of €1.3 billion, aligning closely with analyst expectations amid non-cash write-downs on its operations in Argentina and Peru. Excluding these adjustments, the core business yielded solid operating profits and revenue that slightly exceeded estimates.

Core Operations vs. Latin American Impact

• Net Loss: €1.30 billion (analyst consensus: €1.32 billion)

• Write-Downs from Latin America:

  • Argentina: €1.2 billion

  • Peru: €0.5 billion

• Underlying EBITDA: €0.43 billion (post-disposals)

• Revenue: €9.22 billion vs. €9.10 billion consensus (–2.9% YoY)

Telefónica’s strategy to exit lower-return markets in Peru and Argentina—selling its Argentinian unit for $1.25 billion and divesting from Peru at a loss—highlights its focus on high-growth regions: Spain, Brazil, the UK, and Germany.

Financial Strength and Strategic Focus

With resources freed from Latin America, Telefónica can invest in 5G expansions and fiber networks in its core markets. To evaluate Telefónica’s post-write-down balance sheet strength against its peers, check credit metrics and leverage ratios.

2025 Developments to Watch

1. Capex in Spain & Europe: Will unlocked capital hasten the deployment of fiber and 5G?

2. Growth in Brazil: Brazil remains critical for subscriber growth—monitor ARPU and churn rates.

3. Dividend Stability: Telefónica reaffirms its annual payout; track cash-flow cycles for confirmation.

Despite the reported loss, Telefónica’s strong Q1 performance and strategic reallocation towards core markets prepare it to handle near-term challenges and seize growth opportunities in Europe and Brazil.