Tax adjustments and healthy wireless revenues helped Telus Corp. report a second-quarter profit of $356.6-million, up 88 per cent over year-ago net earnings of $189.5-million, and the telecom firm raised its guidance for the full year.
Telus also unveiled a partnership that will bring a new wireless provider, Amp'd Mobile, to the Canadian market in 2007. Amp'd, a U.S. carrier that focuses on the youth market, will use Telus's wireless network and will be responsible for the cellphone entertainment content and handsets. Telus said it will handle sales, distribution, customer care, network operations, pricing, and billing. Telus's strategic venture investment arm also made a $7.5-million (U.S.) equity investment in Los Angeles, California-based Amp'd Mobile Inc.
Telus said Friday its profit amounted to $1.02 (Canadian) per diluted share, compared to 52 cents per share in the prior-year period.
Included in its earnings were favourable tax related adjustments of $107-million, or 34 cents per share. They were generated by a decline in tax rates, and the recognition of investment tax credits, Telus said.
Analysts surveyed by Thomson Financial had looked for earnings of 66 cents per share in the quarter.
“Our national wireless and data growth strategy continues to generate strong consolidated top and bottom line growth for Telus despite the challenging wireline environment,” president and chief executive officer Darren Entwistle said in a statement.
“Wireless revenue, which is now 44 per cent of consolidated revenue, was up 18 per cent in the second quarter.”
Consolidated revenue gained six per cent to $2.1-billion from $2-billion a year earlier, driven by its wireless and Internet businesses, the Vancouver-based company said. Telus added 123,000 wireless customers, and average monthly cellphone subscriber revenue edged up $2 to $63. The company signed up 29,200 high-speed Internet subscribers.
However, revenue growth was tempered by declines at Telus's local and long-distance businesses. The number of local phone lines slipped by 44,000 in the quarter as gains in the business market were offset by the lower demand in the residential sector as some customers switched to competitors.
The phone companies have faced greater competition in recent years as cable operators entered the local phone market.
Telus raised its full-year guidance Friday. It now expects full-year revenues to come in $25-million higher than previously forecast at between $8.625-billion and $8.725-billion. Expected earnings per share were increased 50 cents to between $2.90 and $3.10.
