Telus Misses Profit Estimates Amid Alberta Economic Slowdownby
Company boosts retention spending during holiday quarter
2016 revenue forecast could miss analysts' projections
Telus Corp. reported fourth-quarter profit that missed analysts’ estimates as it increased spending on customer retention amid economic weakness in its home market of Alberta.
Earnings excluding some items were 54 Canadian cents a share, the Vancouver-based company said in a statement Thursday, compared with the average estimate compiled by Bloomberg of 55 Canadian cents. Sales were C$3.22 billion ($2.3 billion), compared with a projection of C$3.25 billion. The carrier added 62,000 wireless contract subscribers. Six analysts surveyed by Bloomberg estimated 74,000 on average.
Telus spent 17 percent of wireless revenue on keeping customers, C$50 million more than it did in the same quarter last year, as it fought with BCE Inc. and Rogers Communications Inc. over the busy holiday season for new subscribers. That figure was still lower than expected, because the quarter was one of the most competitive in years, Phillip Huang, an analyst at Barclays Plc, said in a note to clients.
Telus forecast 2016 revenue of C$12.8 billion to C$12.9 billion, while the average estimate was for C$12.9 billion. The rout in oil prices has hit Alberta’s economy hard, with unemployment in the province surpassing the national average for the first time since 1988. Telus’s customers are largely concentrated in Western Canada.
- Average revenue per wireless user was C$63.74, compared with the average analyst estimate of C$63.64.
- Wireless contract customer churn was 1.01 percent, slightly higher than analyst expectations of 0.99 percent.
- Telus expects to spend C$2.65 billion on capital expenditures in 2016, higher than the average analyst estimate of C$2.43 billion.