Here's why this $41 billion ASX 200 stock is falling today

This top income stock has started the financial year positively but the market isn't overly impressed.

| More on:
Lines of codes and graphs in the background with woman looking at laptop trying to understand the data.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Transurban Group (ASX: TCL) shares are on the slide on Tuesday morning.

At the time of writing, the $41 billion ASX 200 stock is down almost 2% to $13.03

Why is this ASX 200 stock falling?

Investors have been selling the toll road operator's shares this morning after it released its first quarter update and revealed a decent start to the year. However, with the market tumbling today, this hasn't been enough to stop its shares from falling.

According to the release, for the three months ended 30 September, Transurban's average daily traffic (ADT) increased by 1.1%, averaging 2.5 million trips per day. Management notes that this result was supported by growth across all markets, except Melbourne.

Melbourne ADT decreased 1% in the quarter. This was driven largely by Western Link, which recorded a decline of 1.5%. This was due in part to continued construction works along Footscray Road and the West Gate Freeway as part of West Gate Tunnel Project works and reduced container volumes through the Port of Melbourne.

Traffic in Sydney grew by 1.9% during the quarter. This was due to an improvement in workday related trips and heavy vehicles. All freight corridors in Sydney experienced growth in heavy vehicles, particularly the East/West route along WestConnex (WCX).

The company revealed that WCX ADT increased 11.5%, benefiting from Rozelle Interchange traffic, which opened 26 November 2023, and Sydney Gateway's opening in early September. Ongoing negative impacts from construction projects continued to be experienced during the quarter.

Brisbane traffic increased 1.3% during the quarter, supported by a 2.9% improvement in freight related travel. Whereas North American traffic continued to grow, with traffic increasing 6.5%. The 95 Express Lanes ADT increased by 11.6%, supported by the Fredericksburg Extension which now represents 20% of all 95 Express Lanes trips.

Management commentary

The ASX 200 stock's CEO, Michelle Jablko, was pleased with the quarter. She said:

We are committed to providing value to customers, with 2.5 million average daily trips across our assets that come from moving goods and freight around cities, commuting and casual trips. Our roads serve a wide variety of customer needs and ultimately get people where they need to be safer and faster.

While parts of Sydney and Melbourne are being impacted by construction, once complete we expect to see benefits in the form of enhanced travel time savings and improved network traffic flows.

Ms Jablko also reaffirmed plans to pay a 65 cents per share dividend in FY 2025. She adds:

This supports our FY25 distribution guidance of 65 cents per security, which our Board has reaffirmed today. We continue to look for ways to remove complexity and generate further efficiencies in the way we operate. In addition, we are working on a number of opportunities that position us to grow both in existing and new markets.

This represents a 4.8% increase on the 62 cents per share dividend that the ASX 200 stock paid out in FY 2024. And based on its current share price, it will mean an attractive 5% dividend yield.

More on Industrials Shares

A middle aged man with a moustache and wearing casual clothes holds a plumbing plunger in one hand a a piece of toilet pipe in the other with an exasperated look on his face.
Earnings Results

2 large-cap ASX industrial shares diving on quarterly updates

The market has spoken today.

Read more »

Agricultural ASX share price on watch represented by farmer in field looking at tablet computer.
Industrials Shares

How a fading El Nino makes this ASX 200 stock a buy

Tech improvements and favourable weather could drive this ASX 200 stock to new heights.

Read more »

Logistic workers sitting amid pallets and stock in a warehouse.
Industrials Shares

Up 40% in 2024, this ASX 200 stock could 'deliver double-digit earnings growth in the coming years'

A fundie thinks this global stock could achieve good growth.

Read more »

Rubbish and waste around a green recycling logo.
Industrials Shares

'Strong outlook': Buy these ASX 200 industrial shares with healthy growth forecasts

These stocks have been backed by experts.

Read more »

drone stuck in a tree representing crashing Aerometrix share price
Industrials Shares

Why has the DroneShield share price crashed 46% since July?

The defence industry is climbing, but DroneShield has been left on the ground.

Read more »

A man dives off a boat into the sea, indicating a share price fall
Industrials Shares

This $1 billion ASX 300 stock is up 35% in 2 weeks. Here's why it's diving deep today

The high flying ASX 300 stock has come under heavy selling pressure today. But why?

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Earnings Results

Brickworks share price jumps 7% on FY24 earnings beat and dividend increase

The company's profits didn't fall as much as expected in FY 2024.

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Industrials Shares

This $6.5 billion ASX 200 share just crashed 12%!

Trading conditions have become tough for this stock. Let's see what's happening.

Read more »