May 6, 2009 / 3:10 PM / 9 years ago

UPDATE 2-Manitoba Tel profit slides; plans more job cuts

* First-quarter EPS C$0.57 vs C$0.83

* EPS cont ops C$0.71 vs C$0.84

* Revenue flat at C$483 million

* Expects to hit lower end of 2009 outlook

* Sees 160 additional job cuts at MTS Allstream (Adds details, background, analyst comment)

TORONTO, May 6 (Reuters) - Manitoba Telecom Services MBT.TO posted a lower first quarter profit on Wednesday and said it would cut another 160 jobs at business communications unit even though the economy in its home province is holding up better than the rest of Canada.

The company also said it expects to achieve at least the lower end of its 2009 forecasts even though it said the economic outlook had deteriorated since December 2008, when it issued the forecast.

The regional telecom company earned C$37 million ($31.49 million) or 57 Canadian cents a share, for the quarter, compared with C$54.2 million, or 83 Canadian cents a share, a year ago.

Earnings from continuing operations fell to 71 Canadian cents a share from 84 Canadian cents.

Revenue rose to C$483 million from C$476.4 million.

Analysts had expected Manitoba Telecom to earn 76 Canadian cents a share, excluding items, on revenue of C$473.6 million, according to Reuters Estimates.

“In our view, the bulls on this stock will say the business is now stabilized,” National Bank Financial analyst Greg MacDonald wrote in a note to clients.

“After these results, we are inclined to agree, though we continue to see economic risk and recognize that ... long-term cash flow growth will likely be flat, despite revenue stabilization.”

MTS said it increased its cost-reduction target for 2009 to between C$50 million and C$60 million, up from the previous target of C$35 million to C$45 million for the year.

It said its cost-cutting program has exceeded expectations and this will let it get “an early start” on cost cuts in other areas of the company.

“Looking forward, we continue to believe we will achieve at least the lower end of our guidance ranges for key metrics over the full year, even though the economic outlook has deteriorated since our 2009 outlook call,” Chief Executive Pierre Blouin said in a statement.

On Dec. 17, 2008, the company said it it expected earnings per share of between C$2.90 and C$3.20 for 2009. [ID:nN17331682]

MTS shares were down 44 Canadian cents at C$33.91 on the Toronto Stock Exchange on Wednesday .

$1=$1.175 Canadian Reporting by Wojtek Dabrowski in Toronto and Ashutosh Joshi in Bangalore; editing by Rob Wilson

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