The Telstra Corporation Ltd (ASX: TLS) share price is flat at $3.13 today and down around 5% over the past year (excluding the beneficial impact of dividends) as the giant telco struggles to fill the profit hole left by the transition to the government-owned national broadband network (nbn) of internet services.
As a result of the falling earnings and its management team's realisation that it will need to reinvest more operating cash flow into growth ventures the telco has been forced to cut its dividend to just 8 cents per share for the six-month period ending December 31 2018.
This compares to 11 cents per share and 15.5 cents per share paid out in the prior two corresponding half-year periods.
In other worrying news for investors, Telstra's own CEO Andy Penn choose to sell 300,000 shares for $3.24 per share on February 22.
Mr. Penn reportedly sold to fund tax obligations as a result of the award of other shares, which may be true, but CEO selling never inspires much confidence in a company's outlook.
For investors one important question to consider is whether the Telstra dividend has bottomed or not, as this is likely to have a large input on the medium-term direction of the share price.
