THE Philippine Long Distance Telephone Co. (PLDT) is confident it will exceed last year’s earnings despite a very challenging third-quarter period which saw a shift in the spending priorities of consumers.

Based on the nine-month results, PLDT chairman Manuel V. Pangilinan said the company’s reported net income for the year is likely to exceed last year’s P34.6 billion. The company’s core profit guidance at P41 billion was also maintained. If this will be achieved, a P3-billion increase in core net profit will be realized for 2009.

“Our core net income for the fourth quarter will be a minimum of P10 billion. For our reported net income this year, it will be higher than last year,” the PLDT top official said.

From January to September this year, the PLDT Group posted a core net income of P31 billion, up 11 percent from the P27.8 billion recoded in the same period last year. Its reported net income also rose to P30 billion for the same period, an increase of 15 percent from the P26.2 billion it previously posted.

For the third-quarter period alone, core income went up by 11 percent to P10.11 billion while reported net income ballooned by 49 percent to P10.3 billion. However, total revenues only increased by one percent to P36.12 billion.

“The third quarter saw a number of events that produced a negative impact on our business-there were natural calamities and even a pandemic that resulted in an unusually high number of holidays and class suspensions. And in our business, no school or work means lower usage,” said PLDT president Napoleon Nazareno.

The third quarter is traditionally the weakest period of the year for the industry. Pangilinan said this is particularly true this year as consumers adjust their budgets and rethink their spending priorities after the country was battered by successive natural calamities, compounded by the delay school openings as a result of the flu outbreak.

“While we expect the usual boost in the fourth quarter from holiday spending, we expect that this may be somewhat dampened as the recent typhoons caused extensive damage all around. Even with OFW (overseas Filipino workers) remittances holding up, we may see consumers adjusting their budgets and rethinking their spending priorities. As a result, we are taking a cautious stance and revising our revenue and Ebitda (earnings before interest, taxes, depreciation and amortization) guidance,” said Pangilinan.

Service revenues for the full year may hit P146 billion from an earlier target of P148 billion but still P3 billion higher than what was reported last year. The company said Ebitda (a measure of cash flow) may hit P88 to P88.5 billion from an earlier guidance of P90 billion.

Pangilinan reported that the first nine months performance of the company reflected the higher recurring net income, lower net losses from foreign exchange revaluation and the lower statutory tax rate.  The period also reflects the equity share of Pilipino Telephone Corp. (PIltel) in the earnings of the Manila Electric Co. (Meralco).