OUTLOOK: Telstra H1 to Dec net profit pre-abnormals 2.04-2.40 bln aud vs 2.093
2001-03-06
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Telstra Corp is expected to report Wednesday a net profit
pre-abnormals of 2.04-2.40 bln aud for the six months to December, compared
with 2.093 bln in the previous corresponding period, analysts said.
They said the company would book abnormal gains of about 500-600 mln after
taking into account a superannuation provision writeback, its gain on the sale
of a 10 pct stake in Computershare and writedowns of the valuations for its
investments in several internet companies.
Shaw Stockbroking head of industrial research Scott Marshall forecasts a
net profit pre-abnormals of 2.04 bln aud, with positive factors "coming mostly
from cost cutting rather than anything else. Even that would probably bethan offset by their exposure to Pacific Century CyberWorks."
Merrill Lynch analyst Patrick Russel has a net profit pre-normal forecast
of 2.07 bln aud after an EBITDA of 5.0 bln aud.
He said the company's earnings are unlikely to come in too far from the
range of expectations and any negative stock price reaction to disappointing
results should not be too severe.
"Telstra's long distance revenue declines are likely to be exacerbated by
market share loss," Russel said.
JP Morgan Ord Minnett analyst David Wilson said he is looking at a net
profit pre-abnormal of 2.12 bln aud, or 2.656 bln post abnormals.
The net after tax abnormal gain of 535 mln aud he is looking for includes a
725 mln aud superannuation provision writeback, a 187 mln profit from the sale
of the Computershare stake and losses totaling 80 mln relating to writedowns of
the value of its investments in Sausage Software and Solution 6.
"We believe Telstra is less likely to deliver a negative earnings surprise
than the broader market in the reporting season," he said.
Credit Suisse First Boston analyst Guy Hallwright said excluding the
abnormal items, which he expects to have a positive impact of 545 mln, Telstra
is likely to book a net profit of 2.13 bln aud.
"We expect to see the strongest revenue growth from access, data and
intercarrier services; mobile growth is likely to be more subdued and probably
has the most scope to disappoint," he said.
He expects revenue growth of over 30 pct from intercarrier services and 15
pct growth from access revenues, both of which are expected to be strong
contributors in the second half to June 2001 results.
"Mobile revenue growth will be depressed by a dcline in equipment revenues
due to the boost from CDMA handsets in the previous corresponding period. But
even service revenue growth is likely to be lower," he said.
He said the current competitive mobile environment, which would be visible
in the first half results, is likely to become even more evident in the second
half to June results, with margins falling due to rising retention costs and
falling prices in the corporate markets ahead of number portability in
September.
"It is probably too early to see a slowdown in data revenue growth, but we
would expect this to become visible later this calendar year, as competition
continues to intensify in the corporate market," he added.
Further adjusting the forecasts for one-off costs, including Y2K and
analogue closure/CDMA start-up last year and Olympics related costs this year,
EBIT growth should be around 5-6 pct; similar to the growth seen in the
previous corresponding period, he said.
"The market is likely to be more concerned with the quality of the reported
growth figures than the quantum," he said.
UBS Warburg analyst Mark Whittaker said he is forecasting a net profit
pre-abnormals of 2.147 bln aud and a post abnormal net profit of 2.50 bln.
Deutsche Bank expects the carrier to post a net profit pre-abnormal of 2. 4
bln and post abnormal net profit of 2.819 bln.
Macquarie Equities has a post abnormal net profit forecast of 2.69 bln,
though this is subject to further revision.
plk/jrw/jr
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