The Australian | February 7, 2011 | Mitchell Bingemann
TELSTRA will this week reveal that the rot in its fixed telephony business has continued to drag down earnings, but analysts are more concerned with whether or not the seeds of its $1 billion turnaround strategy will bear fruit.
In line with earlier guidance, the telco is expected to report that earnings before interest, tax, depreciation, amortisation will suffer a low double-digit decline when it reports its half-year results on Thursday.
Deutsche Bank analyst Andrew Anagnostellis has forecast that underlying EBITDA will decline by as much as 12.5 per cent to $4.7bn, while revenues will suffer a slight dip of 0.7 per cent to $12.2bn, as growth in mobile and data revenues is offset by the continued decline in its fixed-line telephony revenues.
Mr Anagnostellis expects these dour results to reduce net profit for the half by as much as a quarter, to $1.4bn.
Despite the expected declines, analysts believe Telstra will again declare a fully franked interim dividend of 14c per share, in line with management’s stated objective of maintaining the full-year dividend of 28c for the next two years.
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