Telstra Shares Hit Six-Month High After Surprise Dividend Raise

By Stuart Condie

SYDNEY--Telstra Corp. Ltd. shares hit their highest level in six months after Australia's largest telecommunications provider raised its dividend and flagged further earnings growth.

The ASX-listed company on Thursday said it expects FY 2023 underlying earnings before interest, tax, depreciation and amortization of between 7.8 billion Australian dollars and 8.0 billion Australian dollars (US$5.52 billion and US$5.66 billion). The midpoint of the guidance range is broadly in line with the average analyst's forecast, according to data compiled by FactSet.

Shares in Telstra were up 1.75% at A$4.08 in early trade, reaching their highest level since February. The stock hit a near five-year high in January before cooling amid the global downturn in equities.

Telstra's decision to raise its final dividend to 8.5 Australian cents from 8.0 Australian cents a year earlier surprised analysts, who expected an unchanged payout.

Yet the guidance appears to be a slight downgrade on Telstra's previous outlook since it includes a contribution from the recently acquired Digicel Pacific business, UBS AG analysts said in a note.

Write to Stuart Condie at [e-mail]

(END) Dow Jones Newswires

08-10-22 2035ET