Spanish telecoms giant Telefonica says its first quarter profits fell 1.9 percent to €1.6 billion ($2.26 billion) compared to a year ago, dragged down by a weak performance in its domestic market.

The company said Friday its consolidated revenue increased 10.8 percent to 15.4 billion euros compared to the January to March period of last year, largely on the back of gains in Europe and Latin America. It said its revenue was up 26 percent in Latin America in the first quarter and 8.4 percent in Europe.

But revenue in Spain fell 5.6 percent. Spain is struggling to overcome nearly two years of recession, with growth supine and the jobless rate at 21 percent.

In late trading Telefonica shares were down 0.8 percent at €16.83.

Telefonica chairman Cesar Alierta said the company sticks by its full-year targets despite the drop in first quarter profits.

"Our strong diversification, the scale of our business, and our integrated management model have enabled us to increase revenues and maintain a high level of operating efficiency despite the negative performance of our business in Spain," Alierta said in a statement accompanying the corporate results.