NEW YORK-Australian telecommunications giant Telstra Corp. Ltd. announced Feb. 18 that its net profits for the six months ended Dec. 31 rose by 117 percent from the same period a year ago. Net profits totaled $1.08 billion, about $67 million ahead of median market expectations.
Frank Blount, chief executive of the Melbourne-based carrier, said mobile telephony saw strong but slowing growth during the just-completed half-year. Digital wireless services grew significantly at the expense of analog cellular, he said.
Telstra reported that its exposure to the Asian crisis was “strictly limited,” with no revenues denominated in any of the currencies that have been devalued significantly.
The company said its half-year results are in line with its own projections for the first half of its fiscal year. However, Blount cautioned that performance during the second half typically has been less profitable.
The carrier said it expected competitive pressures to accelerate during the second six months of the fiscal year in its traditional product areas, such as local and long-distance telephone services. However, the company also sees continued growth in its new businesses, including wireless telecommunications and data services.
“Barring any major unforeseen issues and with due regard to some of the risk I just mentioned … we think we are basically on track,” Blount said.
By “on track,” he meant that Telstra’s first-half results have put it well on the way to meeting, if not exceeding, the fiscal year-end net profit of $1.87 billion forecast in the prospectus for its initial public offering.
A third of the company was sold for $9.38 billion in November, and the Australian government retains ownership of the rest, at least for now. Telstra’s initial public offering price to retail investors was just more than $1.30 per common share. Its stock closed at a bit over $2.34 Feb. 17.
