Earnings: SK Telecom Profit Plunges 57 Percent; Books Loss From Helio Sale

imageKorean operator SK Telecom (NYSE: SKM) reported third quarter net income plunged 57 percent to 333.6 billion won ($225 million), from sales of 2.9 trillion won. Profit missed analyst expectations, which had been forecasted to reach 353.7 billion won, based on a Bloomberg poll. South Korea’s dominant carrier, which has a 50.5 percent share of the market, said sales — up 3 percent year on year, and down 1.1 percent sequentially, had been hurt by an increase in subscribers taking on more aggressively priced tariffs and on an overall decline in subscribers. It was also hit by the cost of foreign debt and reported a loss from the sale of its stake in Helio, its JV with Earthlink (NSDQ: ELNK), to rival MVNO Virgin Mobile USA (NYSE: VM). Operating profit was also down, dropping 6.1 percent to 504.1 billion won compared to a year ago, when the company posted a 373.1 billion won gain. It, too, fell short of analyst expectations, estimated at 584.9 billion won.

Other Earnings Highlights:

— Wireless internet revenue down: Wireless internet revenue declined by 11.6 percent year on year to 619 billion won, hit by its 33 percent cut in mobile internet tariffs. On a quarter-on-quarter basis, wireless internet revenue grew 3.1 percent from growth in flat-rate data plan subscribers.

— SK Telecom now has a total of 22.87 million subscribers. The average revenue per user (ARPU) came in at 42,393 won, down by 3 percent year on year and 2 percent quarter on quarter.