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Telecom FY profit misses forecast in first result without Chorus, flags weaker 2013 earnings

Telecom Corp, the country's biggest listed company, missed estimates as it posted its first annual result without the telecommunications network operator Chorus, and signalled next year's earnings will be slightly weaker than 2012.

Net earnings from continuing operations rose to $281 million in the 12 months ended June 30, compared to $88 million a year earlier, the Auckland-based company said in a statement. Statutory profit surged 604 percent to $1.12 billion, or 60 cents per share, including the five months Chorus spent under the Telecom umbrella before being spun-off as a standalone entity. The company took a $257 million charge on its ageing copper lines, which now sit with Chorus, in the 2011 annual result.

Earnings before interest, tax, depreciation and amortisation from continuing operations climbed 48 percent to $1.08 billion on an 8.6 percent decline in sales to $4.58 billion.

Analysts were expecting ebitda of $1.1 billion on sales of $4.67 billion.

Telecom said ebitda in the 2013 financial year will be a "flat-to-single-digit-percentage decline" as it invests to keep broadband market share.

The shares fell 0.7 percent yesterday to $2.755, having jumped 34 percent this year since ditching the regulated Chorus unit last November. The stock is rated an average 'hold' based on 11 analyst recommendations compiled by Reuters, with a median target price of $2.45.

The result is the first under new chief executive Simon Moutter, who took over the reins last week.

The board declared an 11 cents-per-share final dividend taking the annual payout to 20 cents per share.

Chorus will report its debut earnings result as a standalone entity on Monday.

(By Paul McBeth - BusinessDesk)