Telstra shares jump 5% on improved profit, $750m buyback
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More news: Telstra shares were trading more than 5% higher after morning trade, as the telco posted an improved first-half profit and unveiled a $750 million share buyback.
Telstra shares were up 5.5% at $4.14 at midday AEDT.
Jarden analysts said Telstra's capital management was a "key positive surprise", with the announcement of a share buyback and a small increase to its interim dividend.
Telstra lifts first-half profit, announces share buyback
The news: Telecoms giant Telstra has announced an up to $750 million share buyback after lifting half-year profit and sales on the back of momentum from its key mobiles business.
The numbers: Net profit for the six months to December rose 7.1% to $1.12 billion, largely in line with analyst estimates. Total income was up 0.9% to $11.82 billion. Underlying earnings rose 5.8% to $4.25 billion. Telstra will pay a fully-franked interim dividend of 9.5 cents a share, up from 9 cents a year ago.
The context: Telstra's key mobiles business remained the largest contributor to earnings growth, while the telco also delivered $161 million in core fixed cost cuts during the first half. Fixed InfraCo earnings were up by $58 million, reflecting ongoing demand for its assets, while international business earnings were also up by $29 million. The company said it will increase investment on its 5G network by $800 million over four years.
The company announced an on-market share buyback of $750 million, and said it was consistent with its capital management framework. Telstra also said its FY25 strategy remained on track, and left its full-year guidance unchanged.
“These are a strong set of results, delivering a fourth consecutive year of first half underlying growth, reflecting momentum across our business, strong cost control and disciplined capital management,” CEO Vicki Brady said.
The source: ASX
