Telefonica Brasil (Telefonica Brasil) Owner Earnings per Share (TTM)

: 0.50 (As of Dec. 2023)

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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Telefonica Brasil's Owner Earnings per Share (TTM) ended in Dec. 2023 was $0.50. It's Price-to-Owner-Earnings ratio for today is 18.7.

The historical rank and industry rank for Telefonica Brasil's Owner Earnings per Share (TTM) or its related term are showing as below:

VIV' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 5.78 Med: 12.08 Max: 376.17
Current: 18.6

During the past 13 years, the highest Price-to-Owner-Earnings ratio of Telefonica Brasil was 376.17. The lowest was 5.78. And the median was 12.08.

VIV's Price-to-Owner-Earnings is ranked worse than
70.81% of 209 companies
in the Telecommunication Services industry
Industry Median: 11.44 vs VIV: 18.60

Telefonica Brasil's Earnings per Share (Diluted) for the three months ended in Dec. 2023 was $0.20. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 was $0.52. It's PE Ratio ratio for today is 18.05.

Telefonica Brasil's EPS without NRI for the three months ended in Dec. 2023 was $0.24. Its EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2023 was $0.63. It's PE Ratio without NRI ratio for today is 14.91.

Telefonica Brasil Owner Earnings per Share (TTM) Historical Data

The historical data trend for Telefonica Brasil's Owner Earnings per Share (TTM) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Telefonica Brasil Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Owner Earnings per Share (TTM)

1.28

0.97

1.08

1.12

0.54

Telefonica Brasil Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Jun23	Sep23	Dec23
Owner Earnings per Share (TTM)																1.18	1.12	0.50	0.48	0.54

Competitive Comparison

For the Telecom Services subindustry, Telefonica Brasil's Price-to-Owner-Earnings, along with its competitors' market caps and Price-to-Owner-Earnings data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Telefonica Brasil Price-to-Owner-Earnings Distribution

For the Telecommunication Services industry and Communication Services sector, Telefonica Brasil's Price-to-Owner-Earnings distribution charts can be found below:

* The bar in red indicates where Telefonica Brasil's Price-to-Owner-Earnings falls into.

Telefonica Brasil Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Telefonica Brasil's Owner Earnings per Share (TTM) Calculation:

	TTM / Last Quarter	Average of Last 20 Quarters
Net Income	856
Depreciation, Depletion and Amortization	1,530
Change In Deferred Tax	56
5Y Average of Maintenance Capital Expenditure		1,672
Change In Working Capital	132
Shares Outstanding (Diluted Average)	1,655

1. Start with "Net Income" from income statement. Telefonica Brasil's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was $856 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Telefonica Brasil's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Dec. 2023 was $1,530 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Telefonica Brasil's Change In Deferred Tax for the trailing twelve months (TTM) ended in Dec. 2023 was $56 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $1,672 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous quarter. If the revenue decreased from the previous quarter, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous quarter, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Telefonica Brasil's 5-Year Average Maintenance Capital Expenditure = $1,672 Mil

5. "Change In Working Capital" is from cashflow statement. Telefonica Brasil's Change In Working Capital for the trailing twelve months (TTM) ended in Dec. 2023 was $132 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Telefonica Brasil's Shares Outstanding (Diluted Average) for the months ended in Dec. 2023 was 1654.671 Mil.

Telefonica Brasil's Onwer Earnings Per Share for Dec. 2023 is calculated as:

	Owner Earnings per Share (TTM)
=	( Net Income	+	Depreciation, Depletion and Amortization	+	Change In Deferred Tax
=	( 855.911	+	1530.326	+	56.062
-	5Y Avg of Maintenance CAPEX	+	Change In Working Capital )	/	Shares Outstanding (Diluted Average)
-	1671.6593989132	+	132.239)	/	1654.671
=	0.50

Price-to-Owner-Earnings	=	Current Price	/	Owner Earnings per Share (TTM)
	=	9.35	/	0.50
	=	18.7

Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.

Telefonica Brasil Owner Earnings per Share (TTM) Related Terms

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Telefonica Brasil (Telefonica Brasil) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » Telefonica Brasil SA (NYSE:VIV) » Definitions » Owner Earnings per Share (TTM)

Comparable Companies

Traded in Other Exchanges

TSPA:Germany VIVT3:Brazil VIV:Argentina

Address

Avenida Engenheiro Luis Carlos Berrini, 1376, 32nd Floor, Sao Paulo, SP, BRA, 04571-936

Website

https://www.telefonica.com.br

Telefonica Brasil, known as Vivo, is the largest wireless carrier in Brazil with 98 million customers, equal to about 40% market share. The firm is strongest in the postpaid business, where it has 60 million customers, about 42% share of this market. It is the incumbent fixed-line telephone operator in Sao Paulo state and, following the acquisition of GVT, the owner of an extensive fiber network across the country. The firm provides internet access to 6 million households on this network. Following its parent Telefonica's footsteps, Vivo is cross-selling fixed-line and wireless services as a converged offering. The firm also sells pay-tv services to its fixed-line customers.