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Spain's Telefonica lifts revenue forecast but margins pressured

MADRID (Reuters) - Telefonica (TEF.MC) said on Thursday it expected revenue to grow over 9.5 percent this year, raising a previous forecast of more than 7 percent, after acquisitions in Brazil and Spain which, however, pressured margins.

The Spanish telecoms group's core profit (OIBDA) margin is seen losing 1.2 basis points this year from an earlier forecast of 1 basis point, hit by the integration of GVT in Brazil and pay-TV firm Canal+ in Spain.

Telefonica affirmed other full-year targets, including a net debt to OIBDA ratio of below 2.35 and a 0.75 euro per share dividend in 2015 as well as 2016.

The company, which spent the last three years restructuring its business and investing in new networks and content, is now on a firmer footing.

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Core profits rose 6.8 percent in the second quarter to 3.7 billion euros (2.60 billion pounds) and net profit jumped 70 percent to 1.9 billion euros.

Both figures were above analysts' forecast, also helped by one-offs items such as the sale of its British unit and the divestment of Telecom Italia shares.

In its domestic market, which still lags the rest of the group's operations despite recent price hikes, the readings were mixed.

Fixed communications, which include high-margin optic fibre and pay-TV contracts, grew on the quarter but they were offset by continued fall in the mobile phone business, which sent revenue and core profit down year-on-year.

(Reporting by Julien Toyer and Andres Gonzalez; Editing by Paul Day and John Stonestreet)