Telecom’s profit likely to be down by 30%

Telecom's second quarter results are expected to post a 30% fall, after tax, and would not be a surprise as it is within the market predictions, a net profit of $121 million is expected.

According to ABN Amro Craigs broker, Peter, the share price of Telecom is not likely slide. Mr. Peter said, "Telecom will be reporting `Ferrit free', displaying some retail revival and mobile survival, which were all key messages from its first AGM under its new Chief Executive, Paul Reynolds."

Another of ABN Amro analyst, Geoff Zame, sees ebitda to be $437 million, down by 3.5% when compared to the last year's quarter as the company's New Zealand business does not pick up and its Australian subsidiary, AAPT, continues to perform flat. He predicts that Telecom shall either hold on or may make a slight comeback in fixed landline although it has only 2000 broad band customers, but it under takes a "Street Fighter" (door knocking) campaign.

According to Forsyth Barr broker, Peter Young, the forecast of revenues for New Zealand market in the second quarter, is going to see a decline of 0.3% and of Australia, a negative growth, the reasons being lesser revenues from the local service and the resale and weaker foreign exchange position. Mr. Young futher added, "We expect growth in broadband, Internet and information technology services to be offset by declines in mobile and fixed voice revenues."

Both ABN Amro and Forysth Barr expect an announcement of dividend of 6 cents, like last year, which is likely to be paid in March.