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· Posted on
February 21, 2024

Telstra's profits are down but full-year guidance remains the same

The company says its underlying results paint a bit of a better picture.

What's the key learning?

  • On the surface, it looks like Telstra's had a pretty bad first-half: profits slid by a third to $743 million
  • But the company's underlying results show earnings aren't too bad
  • When companies report their financial results, it's often broken up into two separate results: statutory results and underlying results
  • Underlying results can be considered a more accurate representation of a business' earnings, because they remove one-off costs.

Background: With around 19 million customers, Telstra are Australia's largest telco. 

 

What happened: On the surface, it looks like Telstra's had a pretty bad first-half: profits slid by a third to $743 million. But the telco says that ain't the full picture.

 

What else: Telstra reckon the fall in statutory earnings was due to one-off payments. But their underlying earnings are a 'lil better. So it's full-steam ahead for its ambitious plans.

 

So what's the key learning?

 

💡When companies report their financial results, it's often broken up into two separate results.

 

💡 We've got:

  • Statutory results: presented by the company in its formal report. These adhere to pretty strict accounting standards, have been audited and signed off.
  • Underlying results: presented by the company to accurately portray the earnings of the business (i.e. it removes one-off payments).

💡One-offs are removed because they aren't considered ongoing payments. So, we can see why Telstra reckons its full-year guidance is fair game.

‍

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