REPORTING SEASON: Telstra Corporation (TLS)

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Figure 1: Telstra Corporation 12 month chart

 

Telstra’s earnings continue to be driven by key mobile segment

 Telstra Corporation (TLS) delivered a slightly better than expected half-year profit of $2.1 billion for the six months ended 31 December 2014.

 Revenue growth was particularly strong in the key mobile segment with 366,000 domestic retail mobile customers added over the half. Revenue from Mobile rose by 9.6% to $5.3 billion and accounted for ~40% of TLS’s income. This was the strongest level of revenue growth in three years partly thanks to its best ever iPhone launch.

 TLS will be paying eligible investors a fully franked $0.15/share interim dividend on 27 March. The ex-dividend date is 25 February and is a 3.5% rise on last year. This was largely in-line with most market expectations. TLS has a ~4.5% dividend yield and has reactivated its Dividend Reinvestment Plan (DRP).

 Looking ahead, TLS has not changed guidance for the year and expects single digit earnings growth. Australia’s largest telco and sixth largest company said it “…expects 2015 free cash flow of between $4.6bn and $5.1bn and capital expenditure to be around 14% of sales.”

 

You can see all of CommSec’s reporting season analysis by clicking here.

Steven Daghlian, Market Analyst,