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Technology Stocks : PCW - Pacific Century CyberWorks Limited -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (1711)	7/24/2001 3:30:45 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Telstra shares slip below $5 as faith in managers fades Date: 25/07/2001 By Cosima Marriner Telstra shares closed below $5 for the first time in more than three years yesterday, as investor faith in the credibility of management reached a low ebb. The nation's largest telecommunications carrier sank to $4.95 in trading before recovering slightly to close at $4.97, down 5c. Telstra shares have plummeted 26 per cent since early June, when the company warned that 2001 earnings had increased just 5 per cent, half the double-digit growth investors had been expecting. Analysts linked the share price fall to the credibility of Telstra management, now under question in the wake of the earnings downgrade. "The institutions are very determined in their view that management credibility is an issue and also that there is no growth," said one telecom analyst. "You don't pay a premium multiple for that sort of stock." Now trading at about 15 times earnings, some analysts believe Telstra shares are worth $4.50. Telstra chief executive Dr Ziggy Switkowski's recent "fireside chat" with analysts and the media has failed to arrest the company's share price slide. Dr Switkowski did little to allay investor concerns when he said that earnings would remain flat in the current half. The key test of Telstra's valuation will be tomorrow's update on the company's Asian joint venture with Pacific Century CyberWorks. Dr Switkowski will chair the briefing and both Mr Hubert Ng, head of the Regional Wireless Co, and Mr Alistair Grieve, head of IP backbone company Reach, will give presentations. Dr Switkowski is expected to repeat his admission that Telstra overpaid for its $US1.7 billion ($3.3 billion) stake in the PCCW joint venture, which is to be written down as part of the company's full year accounts. He is also likely to confirm that Hong Kong mobile company Regional Wireless is on target and explain how Telstra will kick-start Reach, which is performing below expectations. "I don't think they can be upbeat. I think it would be a mistake to be," said the telecom analyst. At his last briefing, Dr Switkowski said Regional Wireless would post pre-tax earnings of between $US150 million and $US175 million this calendar year and Reach would earn between $US400 million and $US500 million before tax. Investors will also be seeking guidance from Telstra about the company's broader Asian growth strategy. This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited. [SMH Home \| Text-only index] smh.com.au