Telstra has posted an unexpected drop in profit dragged down by regulatory changes and lower revenue from hardware sales.
The company also slashed its income expectations for the full year.
The stock tumbled in early trade, falling through $5 to trade at $4.96 a short time ago. Via investing.com, here’s what that looks like:
Telstra said half yearly profit dropped to $1.79 billion from $2.09 billion last year on revenue that fell from $13.3 billion to $12.8 billion. Its operational profit of $5.18 billion was at the low end of earlier guidance of “low-to-mid single digit,” coming in at 1.6 per cent.
Profits missed analyst expectations of just over $2 billion.
It will pay an interim dividend of 15.5 cents.
Telstra is going through transition from an telecom infrastructure provider to one that offers technology and communications services as the government rolls out its national broadband network. Telstra’s results are being underpinned by the government payments agreed to facilitate the transition of internet customers off Telstra’s networks on to the NBN.
Regulatory changes in the price Telstra can charge rivals to access its copper wire network hurt income by $400 million and operational profit by $38 million. The impact would not be felt in the second half, Telstra said.
Telstra’s retail business saw revenues drop 5.6% with the biggest boost coming from Telstra Operations unit, which offers services to the NBN.