4 Min Read
TORONTO (Reuters) - Telus Corp (T.TO), 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) 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) for landline telephone, television and Internet customers in Western Canada, and against Rogers Communications Inc (RCIb.TO) 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.
The company added 27,000 TV customers and 21,000 Internet subscribers in the quarter, helping its landline unit post an increase in revenue despite facing industry-wide decline in voice telephony demand.
Quebecor meanwhile leaned on cost-cutting and asset sales to notch gains.
A surprising slip in total landline subscribers was "likely reflecting accelerated substitution effects, service maturation, expanding IPTV footprints and perhaps some election-related disruption," RBC Capital Markets analyst Drew McReynolds wrote.
Quebecor's executive ranks have been rumbled in recent months, with controlling shareholder Pierre Karl Péladeau stepping away to represent the separatist Parti Québécois in a provincial election. His lieutenant, Robert Dépatie, stepped down as CEO of Quebecor and Videotron soon after due to health issues.
Françoise Bertrand was named Videotron CEO on Wednesday, while Pierre Dion had previously replaced Dépatie at the helm of the parent company.
Shares in Telus moved 0.3 percent higher to C$39.56 in morning trade on the Toronto Stock Exchange, while Quebecor slipped 0.2 percent to C$26.05.
Telus said its net income rose 4 percent to C$377 million, or 61 Canadian cents a share in the three months to the end of March, compared with C$362 million, or 56 cents a share, a year earlier.
Operating revenue rose 5 percent to C$2.90 billion. Excluding acquisition costs, Telus earned 62 cents a share.
Analysts had on average expected Telus to earn 61 Canadian cents a share on revenue of C$2.87 billion, according to Thomson Reuters I/B/E/S.
Telus said it planned to increase its dividend by 2 cents to 38 cents, payable on July 2 to shareholders as of June 10, as part of its long-term dividend growth plan.
Reporting by Alastair Sharp; Editing by Sofina Mirza-Reid