Telstra posts 1% drop in FY net profit on mobile squeeze

Shoppers in a Telstra retail store in Sydney's CBD browse products in Sydney, Australia.
James Alcock | Getty Images

Australian telecoms giant Telstra on Thursday posted a 1 percent slide in full-year net profit, in line with expectations, and forecast modest earnings growth in the current year.

Net profit came in at A$4.23 billion ($3.12 billion) for the year to June 30, from A$4.28 billion the previous year. The company had flagged a profit broadly in line with 2014 and analysts had forecast a result of A$4.2 billion, according to Thomson Reuters Starmine.

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The previous year's result benefited from a one-off profit of A$561 million from the sale of Hong Kong mobile company CSL.

Testra faces increasing competition on mobile in Australia from international companies, causing a squeeze on margins as it is forced to include more data in its plans.

Dow Jones quoted Macquarie brokers as describing Telstra's outlook for the current year as "disappointing."

"The mobiles impact is coming a little earlier than we had anticipated," Macquarie said.

The company declared a final dividend of 15.5 Australian cents per share, slightly higher than the previous year's 15 Australian cents per share.