Telstra Tipped To Slash Dividend Over Credit Pressure
UBS analysts forecast Telstra will slash its dividend – from 22 cents to 14 cents – following falling revenues and increased competition, coupled with its third network outage this month.
Shares in Telstra dived to seven year low of $2.80 yesterday.
The telco blames software faults for its recent network outage. Patches are scheduled to be put in place.
Last week, Telstra announced its expects full-year EBITDA to be in the “bottom end” of its $10.1 billion – $10.6 billion forecast, citing margin pressure and “challenging trading conditions”.
Despite this, the telco re-affirmed its pledge to a 22 cent dividend.
As per The Australian, USB analysts have today forecast the telco’s 22 cent dividend payout is at risk.
UBS analyst, Eric Choi, states there’s a chance the telco’s credit rating could be dropped from A to A-.
To facilitate the lower rating, Mr Choi claims a revised dividend payout is necessary.
The news increases pressure on Telstra Chief, Andy Penn, as the telco continues to face market pressure.
Shares in Telstra are currently trading 2.5% lower to $2.73.