BRITISH COLUMBIA

Telus second-quarter profit falls to $286M from $299M a year ago, sales up

08/08/2013 11:19 EDT | Updated 10/08/2013 05:12 EDT
VANCOUVER - Telus Corp. (TSX:T) said Thursday it earned $286 million in its most recent quarter, down from $299 million a year ago, as revenue grew six per cent.

The telecommunications company said the profit amounted to 44 cents per share for the quarter ended June 30 compared with a profit of 46 cents per share a year ago.

After factoring out certain items — including restructuring costs and income tax adjustments — earnings per share were 54 cents, up from 48 cents a year ago.

Operating revenue improved to $2.83 billion, up from $2.67 billion.

The company attributed the increase in revenue to growth in both its wireless and wireline business helped by new subscriber additions and higher average revenue per unit.

"Telus continues to generate strong operating and financial results driven by both the wireless and wireline segments of our business, which is significantly differentiating us from our global peers," president and chief executive Darren Entwistle said in statement.

Wireless revenue increased by 5.9 per cent to $1.5 billion in the second quarter compared with a year ago, helped by growth in data services and postpaid subscribers.

Data revenue increased 17 per cent to $601 million in the quarter helping average revenue per unit to increase by 83 cents to $61.12.

The company added 100,000 net new postpaid customers, partially offset by a loss of 21,000 prepaid subscribers for net additions of 79,000 compared with 86,000 a year ago.

Total wireless subscribers were up 3.5 per cent from a year ago at 7.7 million.

Meanwhile, Telus said its wireline revenue increased 6.3 per cent to $1.3 billion in the second quarter, helped by increased data service revenue, partially offset by declines in its traditional phone business.

Data service and equipment revenues increased on growth in Telus TV and high-speed Internet subscribers as well as rate increases.

Telus added 31,000 new TV subscribers to bring its total TV subscriber base to 743,000, up 25 per cent from a year ago.

High-speed Internet net additions totalled 13,000, down from 20,000 a year ago. Telus had 1.36 million high-speed Internet customers at the end of the quarter, up 78,000 from a year ago.

Telus is asking the courts to clarify the new rules for transferring radio wave licences between wireless carriers, which it says favours foreign buyers like big U.S. company Verizon.

The company wants the Federal Court to review a recent decision by Ottawa that blocked it from buying struggling small carrier Mobilicity in a $380-million deal.

U.S. carrier Verizon is reportedly interested in entering the Canadian market and buying new carriers Wind Mobile and Mobilicity when the small carriers' spectrum licences expire.

Under the new rules, Telus, Bell (TSX:BCE) and Rogers (TSX:RCI.B) are prevented from bidding for the licences without government approval.

Foreign ownership restrictions have been removed for small wireless companies with less than a 10 per cent of the market, which opens the door for Verizon and other foreign companies to enter Canada. However, big carriers still can't be more than one-third foreign owned.