TORONTO (Reuters) - Shares in Telus Corp (T.TO), one of Canada’s three big telecoms providers, fell on Thursday after the company reported slowing wireless growth and forecast higher restructuring costs as it announced job cuts.
Shares in the company slumped 3.4 percent in morning trade to C$42.21, their lowest level in nearly three weeks.
The company reiterated its 2015 earnings forecasts, but doubled its expected restructuring costs to C$250 million ($190 million).
It said it will reduce its workforce by around 1,500 people over the next several quarters, with an eye to saving C$100 million to C$125 million a year. Telus had about 43,000 full-time employees in 2014, according to its annual report.
The company is spending billions of dollars to upgrade and expand its wireless and fixed-line Internet networks as it competes for wireless customers with BCE Inc and Rogers Communications Inc (RCIb.TO), and against Shaw Communications for television and Internet customers in Western Canada.
The Vancouver-based company added 69,000 net postpaid wireless customers, who typically spend much more per month than those who prepay.
That was a sharp decrease from a year ago and fewer than the roughly 77,000 customers both wireless market leader Rogers and network-sharing partner BCE added in the same period.
“A tougher double cohort quarter for wireless,” RBC Capital Markets analyst Drew McReynolds wrote in a note, adding fixed-line earnings were a positive surprise.
The “double cohort” refers to the expiration of three-year wireless contracts signed before the introduction of a wireless code that essentially bans them, plus newer two-year contracts up for renewal in the same period.
Telus said higher handset prices, a slower business market and higher churn were to blame.
The company said net income rose to C$365 million, or 61 Canadian cents a share, in the third quarter, from C$355 million, or 58 Canadian cents a share, a year earlier.
On an adjusted basis, Telus earned 66 Canadian cents per share.
Analysts on average expected Telus to earn 64 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Operating revenue rose to C$3.16 billion, in line with expectations.
Telus’ Internet-based Optik TV product helped the company add 24,000 Internet customers, while traditional phone connections continued to drop off.
Optik is steadily eating into Shaw’s dominant share of the television market in Canada’s West.
Telus said it would increase its quarterly dividend by 10 percent to 44 Canadian cents a share.
Reporting by Alastair Sharp Editing by W Simon