REPORTING SEASON: Telstra Corporation (TLS)
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Figure 1: Telstra Corporation 12 month chart
Telstra announces a $1 billion share buyback.
· Telstra Corporation has reported a 14.3% increase in net profit after tax to $4.27 billion which was well ahead of analyst’s expectations of $3.95 billion
· The highlight of the result was the announcement of an off-market share buyback of approximately $1 billion worth of shares. The return of capital to investors has been aided by asset sales over the last 12 months; including the stake in the Hong Kong mobile business CSL for $561million and the disposal of 70 per cent of the directories business, Sensis Telstra.
· Telstra’s Network and Application Services business (NAS) continues to make an important contribution. Whilst the group contributes less than 10% of revenues, growth has been significant in recent years with revenue rising almost 28% in the last year.
· TLS expects low single digit earnings growth over the next 12 months. The outlook for flat earnings growth reflects the absence of CSL revenues. Telstra expects 2015 free cash flow to be in the range of $4.6 billion to $5.1 billion.
· Telstra announced a final dividend of 15 cents fully franked bringing the full year payment to 29.5 cents per share. The final dividend dates are; Record date 29 August 2014; Payment date 26 September 2014.