(Reuters) -Australia's Telstra ( TTRAF ) forecast a rise in annual operating earnings that fell short of market view, sending its shares more than 2% lower on Thursday, even as the telecom firm announced a A$1 billion ($656.10 million) share buyback plan.

The company expects between A$8.15 billion and A$8.45 billion in underlying operating earnings adjusted for lease amortisation in fiscal 2026, compared with A$8.02 billion reported for 2025.

The mid-point of the forecast range was lower than street consensus of A$8.44 billion, according to Jefferies.

Telstra ( TTRAF ) shares fell more than 2% to A$4.88, their lowest in a month, and were among the biggest losers in the ASX 200 benchmark index, which was trading 0.7% higher, as of 0109 GMT.

Analysts at Jefferies said the earnings composition was "a bit disappointing", pointing to softer-than-expected earnings from Telstra's ( TTRAF ) mobile division and a slowdown in customer growth in the second half of the year.

"The FY26 guidance consensus forecast is already at the top end, so there is a risk that consensus forecast may need to be reduced just to bring that into the middle of the range," said Roger Samuel, a TMT equity analyst at Jefferies.

Samuel said the higher-than-expected share buyback looked to have capped the losses in shares.

Telstra's ( TTRAF ) A$1 billion share repurchase plan follows the A$750 million buyback announced in February, and underscores the firm's earnings growth and strong balance sheet.

The buyback is enabled by Telstra's ( TTRAF ) earnings growth and strong balance sheet, and demonstrates the management's confidence in its financial strength and outlook, CEO Vicki Brady said.

Telstra ( TTRAF ) reported 2025 underlying operating earnings of A$8.61 billion, 14% higher than last year and in line with a Visible Alpha consensus. Its statutory profit jumped 31% to A$2.34 billion, in line with street view.

Strong contribution from the mobile, fixed consumer, small business, and enterprise divisions helped Telstra's ( TTRAF ) 2025 profit, further propped up by its cost management initiatives.

Telstra ( TTRAF ) declared a final dividend of 9.5 Australian cents per share, slightly higher than the 9 Australian cents declared for the previous year.

($1 = 1.5242 Australian dollars)

(Reporting by Shivangi Lahiri and Kumar Tanishk in Bengaluru; Editing by Mohammed Safi Shamsi and Subhranshu Sahu)