Telus revenues up, but profit falls
Telus Corp.’s net income fell 39 per cent in its latest quarter to $315 million despite an increase in revenues as operating expenses at its wired services increased from the same time last year.
The Vancouver-based telecommunications company — which owns the Telus, Koodo and Public Mobile wireless brands and internet and video services — said Friday it earned $315 million, or 23 cents per share, for the three months ended June 30, down from $520 million, or 43 cents per share, a year earlier.
Adjusted profits were $316 million, or 25 cents per share, against $416 million, or 35 cents per share, in the second quarter of 2019.
Revenue was up 3.6 per cent from a year earlier at $3.73 billion while total operating expense before depreciation and amortization was up 6.5 per cent overall, fuelled by a $252 million increase at Telus wireline services.
Analysts had estimated 26 cents per share of adjusted earnings on $3.56 billion of revenues, according to financial markets data firm Refinitiv.
The company says its earnings decline reflects the COVID-19 pandemic lowering wireless roaming revenue, which is usually generated when customers travel outside their home area, and was partly offset by higher wireline data service margins from business acquisitions and cost-cutting programs.
Telus recorded 61,000 mobile phone net additions and 47,000 wireline customer additions with a historically low postpaid customer loss of 0.59 per cent.
Analyst Drew McReynolds, of RBC Dominion Securities, wrote in a note to clients that mobile additions were much higher than his estimate of 18,000 and a consensus estimate of 25,000.
Telus chief financial officer Doug French said a low churn rate — which goes up if large numbers of customers leave — made it easier to grow the base.
He said most of the wireless subscriber growth came with unlimited plans offered by its Telus premium mobile brand, which began offering that type of plan for the first time about a year ago.
Telus also had to adapt to the widespread closure of retail stores and malls due to COVID19 by redeploying employees to customer care functions, he said.