Telstra TLS Share Price Dividend Promise

Telstra [TLS] shares fell on the news that the telecommunications carrier's latest earnings have fallen by 10 per cent for the first half of the 2005/2006 business year. There may be a positive sweetner to the deal with a promise to maintain an annual dividend payout at 28 cents per share until the 2008 financial year. Telstra reported a $2.14 billion net profit for the six months to December 31, down 10.3 per cent from $2.39 billion in the previous corresponding period. Sol Trujillo the Chief executive of Telstra said customers had continued to ditch its fixed line calling products in favour of internet and mobile products.

UBS had downgraded Telstra [TLS] from Buy 2 to Neutral 2 and cut its 12-month price target to $4.40 from $4.55 noting that their high margin fixed phone line revenues in sharp decline and the Telstra's dependence on its strategy of cutting costs was increasing. On the other hand Credit Suisse maintained its 'outperform' rating on the stock and maintained its price target at $4.78.