C&W keeps outlook

LONDON (Reuters) - Telecoms group Cable & Wireless (C&W) (CW.L) reiterated its guidance for full-year core earnings on Friday, in spite of pressure in the Caribbean, where fewer tourists are using its services.

"In the first quarter of 2009/10, our two businesses continued to make progress despite a more challenging economic backdrop," Chairman Richard Lapthorne said in a statement.

The country's second-biggest corporate telecoms provider said its forecast for group earnings before interest, tax, depreciation and amortisation (EBITDA) was approximately 1.03 billion pounds, based on an exchange rate of $1.50 to 1.001 pounds.

The guidance, which has not changed since it was published in May, knocked shares in Cable & Wireless by around 10 percent when it was first announced and they were up 1.5 percent in early trading on Friday.

Analysts said the statement was still quite disappointing and did not change anything from May.

The full-year guidance comprises earnings input from the Worldwide unit, which used to be called Europe, Asia and U.S., of approximately 430 million pounds, an increase of approximately 32 percent on 2008/09.

Its CWI unit, which operates in the Caribbean, Panama, Macau and others, is forecast to show an increase in earnings of around 6 percent in constant currency terms to approximately $935 million (573.3 million pounds), while its smaller Central unit will record a cost of about 28 million pounds.

C&W said it would continue to cut costs in the Caribbean after tourist numbers fell. Domestic fixed line minutes fell by 9 percent in the first quarter in the Caribbean, while average revenue per mobile user is down 8 percent.

"In the face of this, we are accelerating and stepping up our cost reduction programmes, though there is a lead time for such actions to take effect," it said.