Telstra share price higher on strong FY24 results

Investors are happy with the telco giant's results release. But why?

| More on:
A group of young people smiling and watching TikTok on their mobile phones

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Telstra Group Ltd (ASX: TLS) share price is rising on Thursday.

At the time of writing, the telco giant's shares are up almost 1% to $3.90.

Telstra share price higher on FY 2024 results

Investors have been bidding the company's shares higher this morning after responding positively to its FY 2024 results.

As we covered in detail here, Telstra reported a 1% increase in total income to $23.5 billion. This reflects growth across Mobile, International, InfraCo fixed and Amplitel.

Things were even better for its earnings, thanks largely to the key Mobile business. Mobile earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 9.2% to $5,026 million due to high margin services revenue growth and cost-out.

This led to Telstra recording a 3.6% lift in underlying EBITDA to $8.2 billion and a 7.5% jump in underlying net profit after tax to $2.3 billion.

In light of this profit growth, the Telstra board elected to increase its full year dividend by 5.9% to a fully franked 18 cents per share.

Commenting on the company's performance, Telstra's CEO, Vicki Brady, said:

A consistent and disciplined execution of our strategy has delivered our third consecutive year of underlying growth, and positive momentum across many of our key indicators. Our mobiles business has continued to perform very strongly, with EBITDA growth of over $400 million. This growth was driven by more people choosing our network, with more than 560,000 net new handheld customers, along with ARPU growth.

Looking ahead, Brady revealed that Telstra is expecting further underlying EBITDA growth in FY 2025.

The company's guidance is for underlying EBITDA of $8.5 billion to $8.7 billion. This is narrowed higher from its previous guidance range of $8.4 billion to $8.7 billion.

Broker reaction

Goldman Sachs was pleased with the company's results, noting that its net profit came in comfortably ahead of expectations. It commented:

Income/EBITDA/NPAT of A$23.4bn/A$8.24bn/A$2.14bn, which was -1%/+0%/+7% vs. our estimates, and -1%/+0%/+7% vs. Visible Alpha consensus. Telstra's balance sheet gearing increased to 2.1x (1H24 1.9x) due to increased gross debt and seasonality in FCF, noting FY24 FCFaL improved 7% to A$3.0bn (FY23 A$2.8bn). A final dividend of 9¢ps was declared (fully franked) in-line with expectations (GSe/VA 9/8.9¢ps) implying an EPS/FCF payout ratio of 128%/95% (1H24: 107%/191%).

Another positive, which is likely to be lifting the Telstra share price, is that its guidance for FY 2025 was ahead of consensus expectations. Goldman summarises:

EBITDA range positively narrowed, as expected, while FCF guide appears strong, particularly given it includes 100% of restructuring (i.e. A$300mn). FY25 EBITDA Guidance upgraded to A$8.5-8.7bn (from A$8.4-8.7bn, i.e. in-line with GSe of A$8.595bn but marginally ahead of VA consensus – but likely in-line with Buy side expectations).

The Telstra share price is down 8% over the past 12 months.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

Happy shopper at a clothes shop.
Earnings Results

Why did Myer shares just rocket 9%?

Investors are piling into Myer shares on Friday. But why?

Read more »

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Earnings Results

Up 78% since April, why is the Webjet share price taking off again today?

Webjet shares have soared 78% since 4 April and are lifting off again today. But why?

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Industrials Shares

Guess which ASX 200 stock is crashing 24% on results day

Investors were not impressed with this result. But why?

Read more »

A man in full American NFL playing kit crouches over with his arms across his chest in a defensive stance against a dark background.
Technology Shares

ASX 300 tech stock charges 7% higher to record high on stellar results

This tech stock delivered another impressive result this morning.

Read more »

a group of people sit around a computer in an office environment.
Earnings Results

Guess which ASX 200 tech stock is rocketing 12% on record results

Another half, another record result from this high-quality company.

Read more »

A young man sitting at an outside table uses a card to pay for his online shopping.
Consumer Staples & Discretionary Shares

Why is the Kogan share price crashing 12%?

Profits are down at this ecommerce company during the second half.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Resources Shares

Guess which ASX 200 mining stock is sinking 7% following its quarterly update

Let's see how this miner performed during the third quarter.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

Up 50% in a year, are Xero shares a buy after Thursday's earnings results?

ASX investors reacted positively to Xero’s full-year earnings results on Thursday. Now what?

Read more »