Close watch as Telecom details profit

By ELLEN READ

The country's largest listed company unveils its first-quarter profit this week - a number which has already made headlines.

Telecom shares plunged last week as the company warned that the figures would not meet analysts' expectations of a profit of up to $170 million.

It said it had "strong operating cash flows" and the result "would represent an underlying increase of 7.4 per cent to 11.1 per cent over the first quarter for 2001, adjusted for cross-border lease gains, capacity sales and amortisation of goodwill".

But earnings for the quarter will be down on last year's $151 million for the same period.

Although foreshadowed, the result will be closely watched and the market will severely punish any digression.

Macquarie Equities' Arthur Lim said interest would focus on the reason for the lower number - whether it was structural or seasonal. A seasonal explanation would be forgiven but a structural one could lead to downgrades for the company, he said.

That number aside, talking is the theme of the week with many annual meetings taking place.

Fletcher Forests shareholders will be looking for an update after the company's failure to secure the assets of the defunct Central North Island Forest Partnership.

Tourism Holdings will be keenly watched for a progress report on the firm's Australian operations.

Lim said the New Zealand market was humming along nicely and events across the ditch had been the sticking point.