Australia's top carrier posts 14% profit growth

Telstra missed expectations with a 14% rise in second-half profit and forecast growth in the year ahead that was also below analysts' expectations, a Reuters report said.

Telstra, three years into a five-year plan to cut costs and transform its networks, raised its forecasts for 2010 to 3%-4% annual growth in revenue and 3%-3.5% growth in earnings before interest, tax, depreciation and amortisation, up from an earlier target of 2.5-3% growth for both.

'At present we are seeing minimal impact from the prevailing macroeconomic environment on our domestic business,' Telstra said.

The Reuters report also said the carrier would consider using its strong free cash flow to increase returns to shareholders, make acquisitions or cut debt.

For the year ahead Telstra said it expected 3-4% growth in sales and 6-8% growth in earnings before interest and tax, compared with analysts' forecasts for a 2.7% rise in sales and an 8.5% rise in EBIT.

JP Morgan analysts warned ahead of the result that broker forecasts for the 2009 financial year were bullish at a time when Telstra faced a slowing economic growth in Australia, which was likely to curb demand from corporate customers, the Reuters report said.

Net profit for the six months to June rose to A$1.766 billion (€1.02 billion, US$1.5 billion), up from A$1.549 billion (€900 million, US$1.3 billion) a year earlier, in line below analysts' forecasts of A$1.808 billion (€1.07 billion, US$1.56 billion) given by Reuters Estimates.

The main drivers were strong growth in sales of high-speed internet services to homes and advanced services on mobile phones, as it lured customers from its main rivals Optus, owned by SingTel.

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