MADRID (Reuters) -Spain’s Telefonica (NYSE:) posted a smaller-than-expected fall in first-quarter net profit on Thursday helped by inflation-matching price rises in most markets, operating efficiencies and strength in its cloud and cybersecurity business.

The net profit dropped 20% to 706 millions euros (742 million), but it beats the forecast of analysts who conducted a survey for companies.

Telefonica’s core earnings dropped 6.4% to 3.2 billion euro on lower revenue of 9.41 billion. Analysts had expected that revenues would fall 9% and 2.96 billion respectively.

In a note to investors, analysts from brokerage Renta 4 reported that the results exceeded all expectations.

Telefonica’s stock rose by 4.3% and the blue-chip IBEX 35 index declined 1.6%.

Core earnings increased by 2.1%, on top of a 3.2% increase in revenue, the company reported.

Jose Maria Alvarez Pallete, CEO of Telefonica said that the firm’s strong start to the year was in an atmosphere of geopolitical instability and inflationary tensions.

Telefonica attributes its performance to its ability adapt prices to inflation in all markets, favorable currency swings, and its tech business which offers cybersecurity, big data, and other internet-of-things-related services.

According to the company, digitalization of operations has resulted in cost reductions.

Revenue was up 242 millions euros due to currency fluctuations. The tech unit also contributed 299 million which is 81% more than the previous year.

Company benefited from a plan to reduce jobs and increase prices in Latin America. The fees of the company are also indexed to inflation.

Telefonica said it still expects a low single-digit increase in revenue and core earnings, but this excludes the effects of asset sales.

A dividend of 0.3% per share was confirmed by it. This will be paid in two equal installments in December 2022, and June 2023.

Angel Vila, chief operating officer of Angel Vila stated the strength and resilience of Angel Vila’s company in the first quarter. He expects additional tailwinds during the second half.

On a conference phone call, he stated that “we will monitor the development over the year in order to make, where necessary, upside adjustments [to the guidance]”.

($1=0.9517 euros)