After record drop: PLDT share prices could fall deeper, warns analyst

Shareholders of Philippine Long Distance Telephone Co. (PLDT) can expect share prices of the company to fall further, following the company’s announcement of a drop in its net income for 2015.

"Shareholders should expect that prices will underperform," Luis Limlingan, business development head at Regina Capital Development Corp., said in a text message to GMA News Online on Monday.

PLDT earlier in the day announced that its consolidated core net income fell six percent to P35.2 billion last year from 2014’s P37.4 billion, while its net income suffered a 35-percent loss to P22.1 billion from P34.1 billion.

Share prices of the company then closed the day down by 17.86 percent or P398.00 at P1,830.00 apiece, the company’s biggest single-day drop since 1987. That wiped some P86 billion off the company's market capitalization.

"Perhaps PLDT may suffer from weak earnings in the succeeding period hence the stock price will fall further," Limlingan said.

During the company’s announcement, chief executive officer Manuel V. Pangilinan said it has set an income guidance of P28 billion for 2016, the lowest in more than a decade.

"The working budget is P28 billion for 2016. Assumption is that it will gradually improve in 2017 and 2018 by not much, but at least there’s some improvement in core profitability," Pangilinan said.

According to him, the next two to three years will be "challenging" for the company as it tries to fend off rival Globe for market supremacy.

"Last year alone we lost about five million subscribers to Globe — the loss of subscribers to Globe and incremental ads they managed to gain accounted probably for the biggest hole in our service revenues in prepaid,” Pangilinan said.

"As PLDT and Smart try to regain its market share there will be some give-ups... promotional marketing costs," he added. —JST, GMA News