Two stocks that sank on ASX – Telstra Corporation Ltd and Slater & Gordon Ltd
Weak half year results dragged the stock lower: Telstra Corporation Ltd (ASX: TLS) stock fell over 6.5% on February 16, 2017 impacted by the weak results. Overall income excluding finance income fell 0.7% to $13.7 billion for half year of 2017 while EBITDA dipped 1.6% to $5.2 billion. Weak hardware revenue contributed to this performance. The group’s overall revenue from fixed business fell 4.7% to $3.3 billion during the period even though fixed data revenue rose 1.8% to $1.3 billion. The group witnessed a fall of fixed voice revenue by 9.4%. Moreover, the group’s guidance is weak for fiscal year of 2017 which forecasts a mid to high-single digit income growth and low to mid-single digit EBITDA growth. Given the weak first half income growth management reported that their income growth would be at the bottom end of their mid to high-single digit range for FY17. Free cash flow is forecasted to be in the range of $3.5-4 billion while capital expenditure is forecasted to be over 18 per cent of sales.
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