Telstra shares fell 5.2 per cent on Thursday after the release of the company's FY26 results. The stock opened at $4.95, reached an intraday low of $4.74 around midday, and recovered to $4.79 by the close.
Revenue excluding finance income fell 0.8 per cent to $22,937 million. Underlying net profit after tax rose 4.9 per cent to $2.5 billion and underlying EBITDAaL increased 4 per cent to $8.3 billion, landing near the top of the guidance range.
Cash generation was the standout line. Cash earnings grew 11.6 per cent to $2.9 billion and cash earnings per share rose 13.8 per cent to 25.5 cents, while reported earnings per share increased 5.3 per cent to 19.9 cents.
The board declared a final dividend of 10.5 cents per share with 90.48 per cent franking, up from 9.5 cents fully franked in FY25. The full-year payout of 21 cents represents an increase of 10.5 per cent and a yield of 4.4 per cent excluding franking credits.
A new on-market buyback of up to $1 billion was announced alongside the result. The previous $1.25 billion buyback completed in June 2026 and cancelled 2.2 per cent of shares on issue, bringing the two-year total to roughly 3.6 per cent.
Balance sheet settings held within targets. Net debt rose $0.9 billion to $17.3 billion, including a $0.3 billion derivative valuation change, and the debt servicing ratio sat at 2.0 times against a 1.75 to 2.25 times range.
Investor concerns centred on subscriber pressure in branded postpaid mobile following price increases, the continuing impact of the July 2024 network outage, and higher capital expenditure. At $4.80 the stock trades near the bottom of its 52-week range of $4.705 to $5.58.
Guidance for FY27 underlying EBITDAaL was set at $8.5 billion to $8.8 billion. Bell Potter retained a hold rating and trimmed its price target to $4.80 from $5.10, lowering the applied price-earnings multiple to 22.5 times from 23.75 times.
