Shares of Telstra Corporation Ltd (ASX: TLS) will be a focal point in the market today after the telecommunications giant revealed its half-year report to investors.
Here are some highlights from Telstra's six-month period ended 31 December 2015.
- Revenue rose 7.6% to $13,681 million
- Profit increased 0.4% to $2,093 million
- A fully franked dividend of 15.5 cents per share was declared, up 3.3% on last year's payment
- Total retail mobile subscribers increased to 16.9 million
- 2016 outlook remains unchanged
"Our results have been achieved against increased mobile competition and acceleration in the NBN multi-technology model roll out," Telstra CEO, Andy Penn, said. "We are actively working to simplify our business, drive down costs and help our customers experience what technology can do for their lives and businesses."
Mobile revenue increased 3.7% to $5.5 billion, while Telstra's fixed business reported a 1.5% decline in revenue. Fixed data revenue grew 6.7%, while fixed voice fell 7.6%.
Looking ahead, Telstra expects to report mid-single digit revenue growth and low-single digit operating profit growth. Full-year free cash flow is forecast between $4.6 billion and $5.1 billion, while capital expenditure is tipped to be the equivalent of 15% of sales.
Foolish takeaway
Telstra's results appear to be in-line with expectations. It was pleasing to see the dividend maintained, mobile subscriber growth continuing and growth areas tracking along nicely. However, investors should be mindful of ongoing erosion in profit margins within the Mobile, Data and IP businesses, which appear to be coming under pressure.
