Telefónica, Spain’s largest telecommunications group, on Friday lifted its full-year sales forecast after nine-monthly profits beat market expectations.

“We are revising our 2005 revenue guidance upwards in light of growth which is significantly outstripping that of our European peers,” the company said, revising its target for annual revenue growth to “in excess of” 15 per cent from 12-15 per cent.

The company also lifted its guidance for revenue growth at its domestic arm to more than 4 per cent compared with an initial range of 0.5-2 per cent.

The more upbeat outlook followed strong growth in revenues and profits over the nine months to September 30. Net profits jumped 36.2 per cent to €3.25bn - higher than analysts predictions of between €3.15bn and €3.20bn as revenues rose 24.2 per cent to €27.4bn.

In the third quarter, net profits increased 53.3 per cent, while revenues were 32.3 per cent higher.

Over the nine months, the company was boosted by 37.8 per cent growth in its customer base to 147.7m thanks to the consolidation of BellSouth’s Latin American mobile businesses and the Czech operator Cesky Telecom, as well as steady growth in its domestic market.

It also benefited from favourable currency exchange rates in Latin America, which now accounts for almost half its revenues.

Telefónica has been pursuing a vigorous expansion policy over the last few years, especially in Latin America, but in recent months has turned its attention on Europe with the Cesky buy and last month’s £17.7bn deal to buy UK mobile group O2.

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