Telstra posts results slump

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Telstra posts results slump

Telco giant report fall in earnings and profit.

Telstra has announced a decline of 15.7 percent or $546 million to $2.9 billion in earnings before interest and tax (EBIT) for the half year ended 31 December 2006.

However, the results were still better than the expected 17 to 20 percent fall detailed in previous guidance.

Profit after tax was $1.7 billion, down $430 million or 20.1 percent on the prior corresponding half year. As expected, these results were affected by transformation costs and other one-off factors that will be more than made up in the second half, the firm claimed.

Sol Trujillo, chief executive officer of Telstra, said the firm is only 13 months into its five year transformation.

“With 47 months to go [in the transformation plan] we have reached the pivot point, with positive earnings growth to recommence in the second half. We are on or ahead of our transformation plan on all fronts. Our financial performance is ahead of guidance. We are winning where it matters - in 3G, broadband and digital online offerings.

“We are improving service and operational performance. We are creating new opportunities by investing for competitive advantage,” he said.

Trujillo said that following the company's strong first half revenue growth, Telstra had lifted full year reported revenue guidance to growth of two and a half to three percent, up from previous guidance of a one and a half to two percent rise, and reported EBIT guidance to growth of three to five percent, up from a previously expected rise of two to four percent.

"The first half has seen us break new ground and deliver a string of firsts, including: in mobiles, we have topped one million 3G subscribers in a record 16 months - and total Next G subscribers reached 415,000 this week - while keeping average revenue per user $20 per month higher than for 2G customers.

“We continuing to win broadband market share; in service, we have reduced ADSL broadband held orders by more than 80 percent from 19,300 in September 2005, despite increasing order volumes; and in fixed lines, we have been gaining residential market share since October 2006, the first time since the advent of competition we have had positive residential churn from competitors," added Trujillo.

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