Canada's Telus fires on all cylinders; Quebecor results mixed

Thu May 8, 2014 11:04am EDT
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By Alastair Sharp

TORONTO (Reuters) - Telus Corp (T.TO: Quote), one of Canada's largest telecommunications companies, churned out another solid quarter of earnings growth on Thursday, raising its dividend on wireless strength and further expansion of its Internet-based television product, Optik.

Meanwhile, regional operator Quebecor Inc (QBRb.TO: Quote) handed in a mixed report card, with customer losses in cable TV and telephony and slow growth in Internet.

Quebecor was still able to beat profit expectations, with a 37 percent jump in adjusting income from continuing operations to C$49.3 million, or 40 Canadian cents a share. Revenue was up slightly at C$1.04 billion.

Quebecor bought wireless airwaves across much of the country earlier this year, but currently only offers its services - cable TV, Internet, landline and mobile telephony - in its home province of Quebec.

Vancouver-based Telus competes against cable company Shaw Communications Inc (SJRb.TO: Quote) for landline telephone, television and Internet customers in Western Canada, and against Rogers Communications Inc (RCIb.TO: Quote) and BCE Inc's BCE.TO Bell among others for wireless subscribers nationally.

"Telus is clearly still taking significant high margin broadband share from Shaw, as well as TV share," Canaccord Genuity analyst, Dvai Ghose wrote in a note, adding the company trades on par with Bell, Shaw and Rogers despite industry-leading operational growth and dividends. "Telus remains our top pick."

Telus said Thursday it signed up 48,000 net contract wireless subscribers, who typically pay more to use high-end smartphones. By comparison, Bell and Rogers signed up almost 34,000 and just 2,000 such customers respectively, in the same period.

Telus said its average wireless customer paid C$61.24 a month for service, compared to Bell's C$57.90 and Rogers at C$57.63. Telus' numbers did not include customers of Public Mobile, a budget operator Telus recently acquired.   Continued...

A woman uses a mobile device while walking past a Telus store in Ottawa February 19, 2014. REUTERS/Chris Wattie