Telus Q3 profit rises to $351 million, smartphones highlight revenue growth

12/31/1969 07:00 EST | Updated 01/09/2013 05:12 EST
VANCOUVER - Telephone and Internet service provider Telus Corp. (TSX:T) reported a surge in third-quarter revenue and earnings Friday and increased its quarterly dividend by three cents to 64 cents per share.

Telus (TSX:T) says its net income rose eight per cent to $351 million or $1.07 per diluted share from $325 million or $1 per diluted share in the same 2011 quarter.

Revenue rose 5.8 per cent to $2.77 billion from just over $2.6 billion in the third quarter of 2011.

Analysts estimates compiled by Thomson Reuters had called for revenue of $2.74 billion.

"Growth was primarily generated by a seven per cent increase in wireless revenue" to $1.05 billion, the company said in its earnings release. That was primarily driven by a 23 per cent increase in data revenue from smartphones.

Wireline revenue growth of four per cent was generated by a 14 per cent increase in data revenue driven by strong TV and high-speed Internet growth.

In dollar terms, revenue from the wireline business, which includes the company's legacy residential phone service, was up by $48 million to $1.27 billion.

Telus said its new, higher dividend would be paid on Jan. 2 to shareholders of record on Dec. 11.

The company's customer base of 13 million grew in the quarter with the addition of 116,000 new postpaid wireless customers, 42,000 new TV subscribers and 26,000 high-speed Internet customers, partially offset by a network access line loss of 39,000.

The company's total wireless subscriber base of 7.6 million is up five per cent year over year and the average revenue per unit increased by 1.5 per cent. The TV subscriber base of 637,000 is up 41 per cent from a year ago, while high-speed Internet customers are up seven per cent to more than 1.3 million.

"Our long-standing strategy to invest in broadband wireless and wireline data technology, services and applications within our core businesses ... has resulted in strong quarterly operational and financial growth," president and CEO Darren Entwistle said.

Meanwhile, the company announced the departure of chief financial officer Bob McFarlane, who is retiring after 12 years with the company. He is being replaced by John Gossling, who has held top jobs at CTVglobmedia and Rogers (TSX:RCI.B) and elsewhere.

Telus will have a single class of shares after shareholders voted strongly in favour of the idea last month, defeating a U.S. hedge fund's attempt to get a premium for holders of the company's voting shares.

The Vancouver-based telecom and New York's Mason Capital Management battled for months over the company's one-for-one share conversion plan with no premium.

Telus also opposed rival Bell's friendly takeover of Astral Media, saying it would control too much of the English-language television market. The CRTC recently killed the $3.4-billion takeover, saying it wasn't in the best interests of Canadians.

Telus is the only major telecom company in Canada that doesn't own media or television assets for content to put on the mobile devices its sells.