The blue-chip's profit for the 12 months to June 30 came in at Aus$3.23 billion (US$3.27 billion), down from Aus$3.88 billion in the previous corresponding period but better than analyst expectations.

It had a strong second half to the financial year, with profit of Aus$2.04 billion, up from A$2.03 billion in the same period last year.

The company also declared a 28 cent dividend, and suggested it would pay the same in fiscal 2012, prompting investors to snap up shares, with the stock adding 5.65 percent, or 16 cents, to Aus$2.99.

"Today's result slightly exceeded market estimates and is perhaps a sign that the telco's fortunes are starting to turn positive," City Index market analyst Peter Esho said.

Revenue increased by 0.7 percent to Aus$25.09 billion, in line with previous guidance, while earnings were Aus$10.15 billion, down 6.4 percent from the previous year.

"We have seen the company return to revenue growth and expect the momentum across the business to continue in 2012," said Telstra chief executive David Thodey.

The formerly state-owned telecom forecast low single digit revenue and earnings growth in the 2011/12 financial year.

"We have always acknowledged the need to translate our 2011 initiatives into tangible financial benefits, so we are pleased with the results in the second half of this year and expect that momentum to continue in 2012," Thodey added.

The company said it had seen one of its best years ever for customer growth, with an extra two million mobile customers -- 1.66 million in Australia and 352,000 in Hong Kong.

Annual revenue from this sector climbed 10.7 percent to Aus$8.1 billion.

Thodey added that Telstra had retained or grown market share in most major products over the year, with the benefits evident in an improved financial performance in the second half.

"We continue to invest in innovative products and services and this differentiation is increasingly being recognised by our customers," he said.

Copyright AFP (Agence France-Presse), 2011