Telecom shares fell 10 per cent today after the company posted a 30 per cent fall in fourth quarter profit and disappointed the market with its guidance for the 2008-09 year.
Although annual profit came in as expected, down 15.5 per cent to $713 million, Telecom said fourth quarter net profit fell to $176 million from $250 million in the same period of last year as it battles increasing competition and rising costs.
It forecast 2008-09 annual profit of between $500 million and $540 million compared to analysts' expectations of about $590 million.
Macquarie Equities analyst Steve Hodgson said the main reason for Telecom's guidance being lower than expected was depreciation and amortisation charges now forecast to be up to $150 million above previous expectations.
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