New Subscribers Boost Telstra Revenue

Submitted by Sharemarket News on 12 August, 2011 - 10:38

Telstra (ASX:TLS) is expecting moderate revenue increase next year and chief David Thodey is confident the mobile and internet spending will boost guidance.

Despite a 6.4 percent drop in earnings, Telstra yesterday posted full years results that exceeded analysts expectations and pleased investors.

Telstra reported $10.15 billion EBITDA last year, a 6.4 percent decline that beat analyst expectations of an 8 percent drop. Net profit trailed behind, however, dropping 17.5 percent to $3.25 billion.

Revenue was flat at $24.98 billion. The company says it will pay a full franked dividend of 14 cents on August 26.

"We're very conscious of consumer confidence at the moment. It's definitely taken a bit of a battering, but if you look at customer growth through the period, our dependency on usage is getting less . . . (so) we feel pretty confident with guidance as it is," said Thodey. "Its prudent and we haven't overstretched ourselves."

The revenue spike of 10.7 percent to $8.1 billion was mainly driven by 1.66 million new mobile subscribers, which more than made up for the $462 million loss from the fixed telephony division.

Last year, Telstra predicted low single digit revenue growth and earnings before interest, tax, depreciation and amortisation in 2012 and announced it would spend up to $1 billion on staff cuts and revenue generation.

Analysts may upgrade the company's outlook today due to the return to earnings growth.

Telstra shares added 5.65 percent, or 16 cents, to close at $2.99 compared to the benchmark S&P/ASX 200 Index closing flat.