UPDATE 1-Telefonica Brasil profit slips on weak demand, financial expenses

miércoles 13 de mayo de 2015 08:15 GYT

(Adds earnings data, context)

SAO PAULO May 13 (Reuters) - Brazilian phone company Telefonica Brasil SA reported a 12 percent drop in first-quarter profit from a year earlier due to stagnant revenue and rising financial expenses.

Net income fell to 580 million reais ($191 million), according to a securities filing on Wednesday.

Few analysts had given forecasts for the company's earnings. To prevent conflicts of interest, several bank analysts suspended coverage as their companies were hired for a share offering to fund Telefonica Brasil's acquisition of broadband provider GVT.

A sharp slowdown in Brazil continued to weigh on earnings, as mobile revenue rose 8 percent, in line with consumer prices over the past year, but fixed-line services fell 4 percent due to disconnected landlines and flat broadband subscriptions.

The Brazilian unit of Spain's Telefonica said earnings before interest, taxes, depreciation and amortization was little changed from a year earlier at 2.569 billion reais.

Rising interest rates and a sharp tumble in Brazil's currency, the real, more than doubled net financial expenses to 218 million reais.

($1 = 3.04 reais) (Reporting by Brad Haynes; Editing by Chizu Nomiyama and W Simon)