Why the Telstra share price has tumbled 5% this morning

The Telstra Corporation Ltd (ASX: TLS) share price has slumped 5.3% lower today after releasing its full-year earnings.

What did Telstra announce today?

The Aussie telco reported 5.9% decline in total income to $26.16 billion in FY20. That is within the guidance range of $25.3 billion to $27.3 billion, albeit a little on the low side.

Telstra's largest segment, Consumer and Small Business, struggled in FY20. The business unit reported a 6.7% slump in income to $13.33 billion while Telstra's Enterprise revenue fell 3.3% to $7.97 billion.

The telco's underlying earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $7.4 billion and landed within guidance.

Telstra also delivered free cash flow of $3.4 billion which was within the guidance range of $3.3 billion to $3.8 billion. The telco also maintained its full year dividend at 16 cents per share, fully franked.

The outlook was a little unclear for Telstra as management acknowledged the difficulties presented by the coronavirus pandemic.

Why is the Telstra share price falling?

It looks like investors have been bearish on the result as the Telstra share price has fallen 5.3% lower to $3.21 per share.

That could be partially due to the estimated impact of COVID-19 with FY21 underlying EBITDA forecast to be $6.5 billion to $7.0 billion.

NBN impacts continue to drag on earnings with management forecasting a negative $700 million impact in FY21.

Despite hitting guidance on a number of key metrics, most of the figures are at the low end of the provided range. That means some investors may have been pricing in a higher-end result than was achieved in FY20.

That has been enough to spook investors and send the Telstra share price tumbling lower in early trade.

How has Telstra performed in 2020?

The Telstra share price has fallen 9.8% lower this year while the S&P/ASX 200 Index (ASX: XJO) is down 8.5%.

It looks like there are some headwinds looming for the Aussie telco but it could still be a solid dividend share based on this morning's results.