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Telecom first-quarter revenue jumped $100 million driven by a strong performance from mobile, broadband and the Yellow Pages Group.
However, analysts warn the results hardly reflect the company's position in the market, as it still faces regulatory uncertainty.
The telecommunications company yesterday reported a 12 per cent rise in net profit to $224 million for the three months to September, with adjusted net earnings of $204 million after taking out the profit from the sale of its 90 per cent stake in Telecom Samoa Cellular.
Profit before one-off items of $204 million was up 2.5 per cent on last year's $199 million, and beat analysts' expectations of $195 million. Telecom's share price yesterday closed up 15c to $4.67.
Operating revenue increased from $1.4 to $1.5 billion, thanks to a strong rise in mobile revenue and rises in revenue from broadband and Yellow Pages.
Dial-up internet and IT Services revenue fell.
Chief executive Theresa Gattung said Telecom would not upgrade its full-year net profit forecast of between $820 to $860 million - compared with $820 the year before - despite the strong first-quarter result, because of competitive price pressures.
ABN Amro telecommunications analyst Ian Martin said the result was a "shallow indicator" of what was going to happen to the company in the current market.
"You can't really read too much into it for the long-term outlook for Telecom, and we really won't be able to until we see the colour of the new regulatory regime," he said.
The Government is weeks away from finalising legislation that will force Telecom to open its network.
Forsyth Barr analyst Jeremy Simpson said once Telecom had more certainty about telecommunications regulation, it would be able to introduce "more aggressive" plans.
However, it would also face tougher competition.
Gattung said mobile revenue increased 7.4 per cent from the last September quarter, driven by the sign- up of 66,000 customers to its Freedom product that offers unlimited calls from a landline to a designated Telecom mobile.
Telecom cut its first-quarter dividend to 7c a share from 9.5c.
The Yellow Pages Group - which Telecom has confirmed it is putting up for sale - increased its revenue from $62 million to $69 million.
Telecom's broadband and dial-up revenue jumped 2.4 per cent from $59 million to $61 million, with Gattung saying it was on target to reach 520,000 retail broadband connections by next June 30.
Its Australian subsidiary, AAPT, continued to struggle, with a drop in revenue of 1.7 per cent to A$292 million ($336 million), and an operational loss of A$5 million, up 33.3 per cent.
