Telus Rises After Earnings Miss on Lower Service Sales
(Bloomberg) -- Telus Corp. shares opened higher after the telecom operator said fourth-quarter revenue rose 5.2%, to C$4.06 billion ($3.2 billion), narrowly beating average analyst expectations, though adjusted earnings fell short.
- Canada’s second-largest telecommunications provider by market value added 87,000 net new wireless phone subscribers. Average mobile phone revenue per user fell 3.4% to C$57.29.
- Roaming revenue declined as lockdown orders across the country kept customers at home. Wireless network revenue was down 1%, and equipment and service sales fell 3.2%.
- The Vancouver-based company’s profitability dropped. Adjusted earnings were 22 Canadian cents per share, versus the average analyst estimate of 25 cents.
- “We did have a few acquisitions, which helped on that revenue line, but we’ve had extremely high-quality growth in both our wireline and wireless businesses,” Chief Financial Officer Doug French said in an interview Thursday with Bloomberg News. He added: “We haven’t assumed in our business plan that we’d have any recovery until the second half of 2021.”
- The report comes shortly after Telus’s technology services subsidiary, Telus International CDA Inc., completed an initial public offering that could pave the way for future acquisitions around the world, according to the unit’s chief executive officer, Jeffrey Puritt.
- “This success story reinforces the efficacy of our uniquely diversified and technology-oriented assets, including Telus Health and Telus Agriculture,” said Chief Executive Officer Darren Entwistle. “Our integrated and broad portfolio of solutions within these growth verticals, combined with a strong financial growth profile, further enhances the differentiated value we are creating for our investors.”
- Bloomberg Intelligence analyst John Butler said the company’s diversification effort could yield future revenue gains. “Telus’s expansion into new markets such as Digital Health, International and 5G is helping offset pressure on wireless sales stemming from a slowdown in Canada and most recently, the Covid-19 pandemic,” he said.
- Telus shares were 0.3% higher to C$27.16 at 9:45 a.m.
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