Telstra share price: where next following H1 results?

The telco’s stock rose modestly at the open today, after reporting a set of first-half results that were in-line with expectations.

Telstra share price: a modest bounce

Telstra (ASX: TLS) – Australia’s leading blue-chip telco – today reported a dependable set of half-year results that were in-line with expectations. In step with that, the share price rose, if only by a touch, up 0.64% in the first 30-minutes of trade, to $3.85 per share.

The stock however fell as much as 1.83% a little after 10:40 (AEDT), after it was revealed that the TPG-Vodafone merger, which was previously blocked by the ACCC, would be going ahead afterall.

Unfolding news aside, on the top-line, Telstra reported total first-half income of $13.4 billion and earnings (NPAT) of $1.2 billion, representing decreases of 2.8% and 6.4%, respectively.

Mobile, making up a significant 44% of the telco’s revenue, grew by 0.3% in the half – to $5.3 billion.

Telstra now has a total of 18.5 million domestic retail customer services online.

Do you own Telstra shares? You can hedge your downside risk by trading CFDs now.

On the bottom-line, underlying earnings (EBITDA) declined 6.6%, coming in at $3.9 billion. When excluding in-year NBN headwinds however, the telco was keen to point out that these earnings 'grew by approximately $90 million, the first time this figure has grown since FY16.'

The company also continued to aggressively cut costs during the half, reducing fixed costs by $422 million – representing a 12.1% reduction. Total underlying fixed costs have now decreased by $1.6 billion since FY16. The company is targeting a $2.5 billion reduction in costs by FY22.

Finally, the Board announced a fully-franked interim dividend of 8 cents per share – made up of a 5 cent ordinary interim dividend and a 3 cent special dividend.

The 5G equation in focus

Telstra's CEO, Andrew Penn speaking of the telco’s focus on technological innovation, said:

'Telstra's ongoing research and investment continues to make Australia a global leader in 5G,' with it being further added that 'as the 5G ecosystem develops, we are seeing more devises becoming available to our customers.’

Looking at this from a product level, it was noted that Telstra launched the 5G enabled Samsung Galaxy A90 in November. Promisingly, it was added that:

‘One quarter of all our Android phone sales since July 2019 have been 5G devices. In total, we have sold more than 100,000 5G-enabled mobile devices and we look forward to that number continuing to grow.'

Interestingly, Apple is yet to release a 5G-enabled phone, though many have speculated that the next Apple iPhone will be underpinned by 5G technology.

Where next: things remain on track

Looking forward, Telstra (ASX: TLS) today took the chance to reaffirm FY20 guidance, with management expecting total full-year income in the range of $25.3 billion to $27.3 billion. On the bottom-line, FY20 earnings (underlying EBITDA) are expected to come in at between $7.4 billion to $7.9 billion.

Across Telstra’s three key financial metrics: Total Income, Underlying EBITDA and Free Cash Flow (FCF) – the telco remains on track to meet market guidance, it was noted.

At the $3.85 mark, the Telstra share price now trades ~19% higher than it did one year ago.

Practise trading Australian bank stocks with an IG demo account now

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.