Telstra’s Share Price Up Despite Full-Year Profits Falling 8% To $3.6 Billion

Despite Telstra’s net profit after tax decreasing by 8.9%, Telstra’s share price is slightly up in today’s trading.

Shares of Telstra Corporation Ltd [ASX:TLS] are trading at $2.99, up 3.29% at the time of writing.

The release of the company’s full year financial results also saw the implementation of their dividend policy that was announced back in August 2017.

Fully franked final dividends are now 11 cents per share, bringing the total dividend for financial year to 22 cents per share, meaning ordinary dividends of 15 cents and a special dividend of 7 cents.

Free Report: Discover four red hot ASX profit plays for 2018. Read Now

NBN Rollout impacting Telstra share price?

Telstra is still attempting to find its feet in the aftermath of the NBN roll out, which saw them take drastic cost-cutting program.

Although there are no major declines in the company’s share price today, the true extent of the impacts are still steeped in uncertainty.

Chief executive of Telstra Andy Penn said the impacts of NBN were a global phenomenon, which understandably is having a big impact on its business.

To combat this, over the next two years $1.5 billion worth of costs are anticipated, accelerating its cost-cutting program to meet $2.5 billion by 2022.

A competitive market, rising prices mean companies like Telstra are now facing a fixed-line where reseller margins are rapidly reducing.

Telstra shrinking to grow?

Telstra has announced plans to halve its empire, creating a separate company based on its $11 billion infrastructure assets.

Mr Penn stated that, ‘The organisation we are becoming will vastly different to the one we are today […] Our workforce will be smaller, knowledge-based one with a structure and a way of working that is agile enough to deal with rapid change.’

Aussie finance expert reveals four Aussie stocks he believes could be top performers in 2018. Get your free report now.

But the challenging environment experienced over the last 12 months isn’t going anywhere for Telstra, at least not anytime soon, as confirmed by Mr Penn:

These competitive pressures are playing out in financial performance and we expect that challenging trading conditions experienced in 2018 to continue in 2019.’

But if little positives can be awarded to Telstra by NBN, it has at least pushed the company to come up with new strategies and investments that’ll hopefully mean better user experiences for us all, and continue this trend in rising share price.

Ryan Clarkson-Ledward

For Money Morning

PS: You’ll find over 2,000 stock listed on the ASX and on any given day a bunch will rise, just like Telstra. It’s near impossible to monitor these on your own. Our analyst Sam Volkering has picked out four Aussie stocks he believes could be top performers in 2018. Check out his free report ‘The Four Best ASX Stocks for 2018’.

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

To find out more about the publications Ryan works on and how you can subscribe, please click on the corresponding link here:

Money Morning Australia