Telstra share price: where next following ‘Covid-19’ update?
'It is at times like these that big business can show leadership and make a contribution to the national response and that is what we at Telstra are doing.'
The Covid-19 update
Telstra (ASX: TLS) today issued a market update which outlined not only the impact the coronavirus has had on its business; but a number of measures that the telco is taking to assists its customers, employees and the Australian economy more broadly.
Even so, investors responded in an undeniably bearish manner, bidding the telco’s stock down more than 6% during today’s session. The ASX 200, by comparison, rallied during the day, finishing out the session up 0.70% or 33 points.
Mind you, the overall message of Telstra’s market release was a positive one. Specifically, the telco noted that it was freezing job reductions, recruiting 1,000 temporary staff to deal with elevated call centre volumes, and even providing help to struggling small businesses and consumer customers.
'We are looking at every aspect of our business to see what we can do for our employees, customers, suppliers and the economy more broadly, while we maintain a focus on long term value creation.’
Better still, it was even noted that Telstra employees (including casual workers) would receive ‘extra’ paid leave during these difficult times.
'While it is critical we maintain a strong position we also believe there are a range of additional initiatives we can undertake now to help support the broader economy.’
Indeed, speaking to the broader impact of the coronavirus crisis, Telstra’s visionary Chief Executive Officer Andrew Penn said:
'COVID-19 is having a profound impact on business across the country. At Telstra we already have more than 25,000 people successfully working from home, and we are supporting many of our customers as they grapple with shifting to working and studying from home.'
Telstra share price: where next?
Ultimately, though Telstra noted that its FY20 cash flow and earnings (underlying EBITDA) are now expected to come in at the bottom of the previous guidance range, the blue-chip telco nonetheless reassured investors that the ‘current outlook remains within the range of [our] FY20 guidance.'
In saying that and by comparison, FY20 capital expenditure (CapEx) is now expected to come in at the top of the previous guidance range, as Telstra brings forward a CapEx spend previously earmarked for FY21 into CY20 – as the company rushes to build-out the capacity of the its network.
The Telstra share price finished out the week at $3.07 per share (-6.12%).
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