The Telstra Corporation Ltd (ASX: TLS) share price is surging higher this Thursday. At the time of writing, Telstra shares are up a healthy 3.66% to $3.97 a share. That share price represents a new 52-week high for this ASX 200 telco. That well eclipses the previous 52-week high of $3.88 a share that we saw earlier this week.
Telstra share price surges on FY2021 earnings report
It's fairly obvious why Telstra shares are rising so steeply today. This morning, the telco released its FY2021 earnings report to the markets, and it has evidently been well received by investors.
As we covered extensively on the Fool earlier this morning, Telstra reported that its total income and earnings before interest, tax, depreciation and amortisation (EBITDA) both fell by 11.6% and 14.2% respectively. Even so, it managed to increase its net profit after tax by 3.4% to $1.9 billion. It also managed to bump up its free cash flow by 11.6% to $3.8 billion.
Those last numbers meant that the telco was able to keep its dividend steady at 8 cents per share. As well as initiate a $1.25 billion share buyback program.
This last news will probably come as a relief for income investors. These investors, perhaps still burned from Telstra's 2017 dividend cuts, may have been nervously eyeing Telstra's still-generous dividend yield. At an annualised 16 cents per share, Telstra is still offering a forward yield of 4.02% on current pricing.
The share buybacks have no doubt been welcomed by investors too. Buybacks, by decreasing the overall share count, increase each Telstra shares' earnings per share (EPS), and are usually conducive to higher share prices due to the laws of supply and demand (less supply means higher prices).
At the current Telstra share price, the company has a market capitalisation of 36.4 million, and a price-to-earnings (P/E) ratio of 26.64.