Many ASX telecom stocks are reporting this week and there's been some strong numbers posted on Wednesday.
Superloop Ltd (ASX: SLC) and Service Stream Ltd (ASX: SSM) are two names that have grabbed investor attention following the release of their FY24 reports.
Both shares are up over 5% at the time of writing, with Superloop fetching $1.69 apiece and Service Stream swapping hands at $1.46 each.
Let's see what these ASX telecom stocks posted today.
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ASX telecom stocks post strong earnings
Superloop's FY24 earnings surpassed market expectations, with the company reporting a 30% jump in total revenue, hitting $420.5 million.
Organic revenue growth came in at 23%, with significant gains across all business segments.
The consumer segment was one takeout for the year, with revenue surging 47.1%, adding 87,000 net new customers.
Superloop's gross margins grew 24.2% to $145.1 million, driving a 45% growth in pre-tax income compared to last year.
Management says that deals with Origin Energy Ltd (ASX: ORG) and AGL Energy Ltd (ASX: AGL) are set to boost Superloop's earnings in FY25. The Origin contract alone is expected to add over $19 million annually in underlying earnings.
Meanwhile, management forecasts 53–63% pre-tax earnings growth in FY25.
This may be one reason why investors are driving this ASX telecom stock more than 5% higher today.
Service Stream grows net profit by 36%
Service Stream is listed in the industrial sector, but the company provides most of its services to the telecommunications industry.
On Wednesday, it has also impressed the market with its FY24 results. The ASX telecom stock's total revenue increased by 11.2% to $2.39 billion.
But this drove a 36.4% rise in net profit to $50.1 million. As such, each 1% of sales growth produced 3.2% of profit growth.
Management said the business capitalised on the "strong demand for the maintenance and upgrade of both telecommunication and utility infrastructure".
The company secured over $2.2 billion in contracted works, expanding its work-in-hand pipeline to $5.5 billion.
Thanks to the profit growth, the board declared a final fully franked dividend of 2.5 cents per share, bringing the total FY24 dividend to 4.5 cents per share.
This is a 200% increase from last year, treating shareholders to a nice bonus leading into Christmas time.
One doesn't have to look much further to see why investors are buying this ASX telecom stock.
Foolish takeaway
These ASX telecom stocks have come in with strong FY24 results, and the market is rewarding them for it.
Service Stream shares have climbed more than 73% in the past 12 months, whereas Superloop is up more than 144% in that time.
