* Q3 adj EPS C$0.89, vs analysts’ view C$0.76
* Revenue C$2.46 bln, vs analysts’ view C$2.47 bln
* Increases dividend, raises full year guidance
* Shares gain 3 percent in Toronto (Adds details, analyst and executive quotes, share price)
By Alastair Sharp
TORONTO, Nov 5 (Reuters) - Strong wireless growth and record television subscriber additions helped Telus Corp (T.TO) post adjusted quarterly earnings on Friday that handily beat analyst expectations.
The company, which provides phone, Internet and television services, mostly in Western Canada, also tightened its full year guidance towards the high end of its previous range and raised its dividend for the second time this year.
The upbeat news helped lift Telus shares 3 percent to C$45.73 on the Toronto Stock Exchange.
Telus teamed up with BCE Inc’s (BCE.TO) Bell Canada unit to launch an HSPA+ network a year ago to challenge Rogers Communications Inc’s (RCIb.TO) leadership position in wireless by allowing them to offer a broader lineup of data-heavy smartphones, especially Apple’s (AAPL.O) iPhone.
“Rogers for years had the monopoly on iconic devices like the iPhone, now that Bell and Telus have it Rogers has to spend more money to retain those customers,” said Jonathan Allen, an analyst at RBC Capital Markets.
Rogers’ profit fell 24 percent in the quarter [ID:nSGE69P0G6], while BCE posted strong wireless additions in the quarter. [ID:nN04175100]
Telus said it added 153,000 wireless subscribers in the latest quarter, including 132,000 lucrative postpaid customers. It said smartphone users make up 28 percent of contract customers, up from 18 percent a year ago.
“Subscriber stats are nicely ahead, so a good quarter,” said CIBC World Markets analyst Robert Bek. “Bell beat wireless expectations, Telus beat wireless expectations, Rogers came in light.”
Telus said revenue from data rose 29 percent to C$291 million due to more smartphone adoptions, higher sales of mobile Internet keys and larger volumes of data roaming.
The company also said it was increasing its quarterly dividend by 5 percent to 52.5 Canadian cents, payable on Jan. 4 to stockholders as of Dec. 10. It had paid 50 Canadian cents a share in July and October and 47.5 Canadian cents in January and April.
The Vancouver-based company is rolling out a rebranded Internet-based television product taking on rival Shaw Communications (SJRb.TO). Shaw, a Western Canadian cable company planning a 2011 wireless launch, said last month that competition was hampering growth. [ID:nN21104780]
Telus said it added 15,000 high-speed Internet customers in the quarter and 38,000 television subscribers, a record that brings its total to 266,000, following the launch of the rebranded Optik IPTV service in June.
“It’s not just a growth area in its own right, it’s also a defensive help with respect to our legacy revenue streams,” Robert McFarlane, Telus’s chief financial officer, said in an interview.
Like the rest of the industry, Telus posted declining revenue from fixed-line operations as customers shift increasingly to mobile phones.
Telus’s net income in the third quarter was C$247 million ($245 million), or 77 Canadian cents a share, down 12 percent from C$280 million, or 88 Canadian cents a share.
Excluding tax-related adjustments and other items, it earned 89 Canadian cents a share. Analysts on average had expected adjusted earnings of 76 Canadian cents a share.
Revenue was C$2.46 billion, just below analysts’ expectations of C$2.47 billion.
Telus narrowed the range of full year 2010 guidance to between C$3.10 and C$3.30 a share from C$2.90 to C$3.30.
$1=$1.00 Canadian Editing by Rob Wilson