Telstra reports 14% profit growth, shares drop (Australia)
According to report, Telstra missed expectations with a 14% rise in second-half profit and forecast growth in the year ahead that was also below analysts’ expectations “At present we are seeing minimal impact from the prevailing macroeconomic environment on our domestic business,” Telstra said. The report also said the carrier would consider using its strong free cash flow to increase returns to shareholders, make acquisitions or cut debt.
Telstra said it expected 3-4% growth in sales and 6-8% growth in earnings before interest and tax, compared with analysts’ forecasts for a 2.7% rise in sales and an 8.5% rise in EBIT. Analysts warned ahead of the result that broker forecasts for the 2009 financial year were bullish at a time when Telstra faced a slowing economic growth in Australia, which was likely to curb demand from corporate customers. Telstra shares have outperformed the broader market so far this year but after the result its shares fell as much as 4% to a low of A$4.32. The shares last traded down 3.3 percent at A$4.35 in a broader market down 2.1 percent. Net profit for the six months to June rose to $1.5 billion up from $1.3 billion a year earlier, in line below analysts’ forecasts of $1.56 billion as estimated. The main drivers were strong growth in sales of high-speed internet services to homes and advanced services on mobile phones, as it enticed customers from its main rivals Optus (owned by SingTel).
