Telus Profit Beats Estimates as Data Spending Climbs
Telus Corp. (T), Canada’s third-largest wireless carrier, reported second-quarter profit that beat analysts’ estimates as customer spending on smartphone data surged. The company raised its forecast for annual revenue.
Excluding one-time charges, profit per share was C$1.02, the Vancouver-based company said today in a statement. The average estimate from analysts surveyed by Bloomberg was C$1. Sales rose 4.3 percent to C$2.67 billion ($2.66 billion), matching the average estimate.
The company forecast annual revenue of C$11.2 billion to C$11.5 billion, up from C$10.7 billion to C$11 billion previously.
Chief Executive Officer Darren Entwistle is ploughing profits back into its improving its network, betting faster data speeds will lure subscribers away from larger rivals Rogers Communications Inc. (RCI/B) and BCE Inc. (BCE) Telus’ strategy stands in contrast to Rogers and BCE, Canada’s number one and two wireless operators respectively, who together have spent more than C$6 billion buying up programming and sports teams including the Toronto Maple Leafs and Toronto Raptors they can repackage and sell to subscribers.
Telus last quarter added 86,000 net new mobile customers, 8.5 percent lower than a year ago. Postpaid subscribers rose 22 percent to 112,000.
Toronto-based Rogers gained 87,000 subscribers and reported profit that beat estimates as job cuts and other cost savings more than offset a slowdown in consumer wireless spending.
BCE, set to report results Aug. 8, may have added 95,000 contract subscribers, according to estimates from Maher Yaghi, an analyst at Desjardins Securities.
Telus said wireless data revenue growth grew 27 percent to C$512 million and its wireless average revenue per unit rose 2.4 percent to $60.29 per customer. Yaghi predicted C$58.87.
Telus’ net income climbed 1.2 percent to C$328 million, or C$1.01 cents a share, from C$324 million or 99 cents a year earlier.
Telus slipped 0.5 percent to C$62.39 yesterday in Toronto.
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