The Telstra Group Ltd (ASX: TLS) share price significantly underperformed the S&P/ASX 200 Index (ASX: XJO) in 2023.
Shares in the ASX 200 telco closed out 2022 trading for $3.99. When the closing bell sounded the end of trading for 2023 on 29 December, shares were changing hands for $3.96 apiece, down 0.1%.
Of course, that's not including the 17 cents per share in fully franked dividends the telco's stock paid out over the year. Adding those back in and the accumulated value of the Telstra share price gained 3.5% in 2023.
Still, that's well below the full-year gains posted by the ASX 200.
Over the 12 months, the benchmark index gained 9.3%. And if we add in the dividends delivered by the income-paying stocks to that equation the ASX 200 gained around 13.9% in 2023.
Which brings us to our headline question.
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Why did the Telstra share price struggle in 2023?
The Telstra share price was actually a relatively strong performer for much of the year.
If you'd bought shares at the end of 2022, you could have sold them on 16 August for $4.25, booking a 6.5% gain. You would also have received the 8.5 cents per share interim dividend.
But the stock took a steep downward turn over the following days after the company released its FY 2023 results and FY 2024 guidance on 17 August.
That might lead you to believe those results were poor. But this wasn't the case at all.
In fact, Telstra reported a 5.4% year on year increase in total income to $23.2 billion. And the ASX 200 telco's net profit after tax (NPAT) leapt 13.1% to $2.1 billion, with underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up 9.6% to $8 billion.
That put FY 2023 EBITDA at the very top of the company's guidance and in line with consensus expectations. And its FY 2024 guidance was also broadly in line with consensus expectations.
Yet the Telstra share price sank 2.8% on the day the company reported and closed down another 3.2% the following day.
As Motley Fool analyst James Mickleboro noted at the time, the selling pressure looks to have come from Telstra's decision to maintain the existing ownership structure of InfraCo fixed for the time being.
"This may have disappointed investors that were expecting value to be unlocked from an asset sale and capital return," Mickleboro said.
As for 2024, with the second day of trading in the new year approaching an end, the Telstra share price is down 1% year to date.
