UPDATE 1-NZ Telecom Q4 profit falls, outlook weaker

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WELLINGTON, Aug 8 (Reuters) - Telecom Corp (TEL.NZ: Quote, Profile, Research), New Zealand's largest listed company, reported a 30 percent decline in fourth quarter adjusted profit, in line with expectations, and said it expected to see further decline in profit in the coming year.

Telecom, a former state monopoly forced by the government to split into three units to boost competition, said strength in Internet and data services earnings helped to offset weaker mobile and fixed line phone income.

"Revenue from IT services for the quarter grew nearly 20 percent when compared to the same period last year and the build of our new WCDMA mobile network is progressing apace," Chief Executive Paul Reynolds said in a statement.

Telecom reported a profit of NZ$176 million ($126 million) for the three months to June 30 compared with an average forecast of NZ$173 million from nine analysts surveyed by Reuters, and last year's adjusted profit of NZ$250 million.

Telecom retained its outlook of a 4-6 percent decline expected in earnings before interest, tax, depreciation and amortisation (EBITDA) the year to June 2009.

It said net profit for the full year to June 2009 would be NZ$500-540 million.

On Thursday, Telecom's shares ended flat at NZ$3.68. The shares have lost 15.2 percent so far this year compared with a 16.4 percent fall in the benchmark top 50 index .NZ50, of which Telecom makes up about 18 percent.

The company's net profit after tax for the year to June 30 was NZ$713 million compared with last year's NZ$3.0 billion, which included NZ$2.1 billion in one-off gains from the sale of its directories business.  Continued...