EURO CDS: France Telecom has announced 2Q EBITDA of E3.98bln exactly in line with analysts estimates.

EURO CDS: France Telecom has announced 2Q EBITDA of E3.98bln exactly in line with analysts estimates. However shares are up very sharply this morning by over 6% after the firm said it will maintain its annual dividend of E1.40 per share until 2012. Given the slightly sluggish grow in earnings seen recently, many analysts had forecast that the telco would divert any excess cash reserves into buying back stock. In its outlook the group was fairly cautious saying "we remain reasonably cautious like all big companies" adding that "growth was a bit less strong than anticipated in macro economic terms". Emerging market growth continues to underpin earnings and counter more stagnant sales at home, with Africa and the Middle East seeing 8% increases in revenues. FT reaffirmed its 12% of revenue capex target, aiming for free cash flow of E8bln for 2010 and 2011. CDS (already trading relatively tight) is 0.5bps tighter at 60bps.