VANCOUVER, BC - Telus Corporation (NYSE:TU) reported its first-quarter financial results, revealing an earnings beat and a slight revenue shortfall. TU share were up 2.2% following the announcement.
The telecommunications giant posted adjusted earnings per share (EPS) of Cdn$0.26, surpassing the analyst consensus by Cdn$0.02. However, revenue for the quarter fell short of expectations, coming in at Cdn$4.93 billion against the consensus estimate of Cdn$5 billion.
In the first quarter, Telus delivered strong customer growth with 209,000 net additions, marking a 28% increase YoY. This growth was propelled by robust demand for the company's portfolio of Mobility and Fixed services. Mobile Phone net additions stood at 45,000, complemented by a record first quarter of Connected Device net additions of 101,000. The company also reported a record first quarter for Fixed customer net additions, which included 30,000 internet customer additions, driven by the PureFibre network and bundled services across Mobile and Home.
Despite the increase in customer additions, Telus faced a slight decline in operating revenues and other income, which decreased by 0.6% YoY to $4.9 billion. This was attributed to lower service revenues in the TELUS technology solutions (TTech) and Digitally-led customer experiences – TELUS International (DLCX) segments, offset by subscriber growth and increases in managed and other fixed data services.
President and CEO Darren Entwistle commented on the results, stating, "Our robust performance is underpinned by our strategic focus on margin accretive customer growth, globally leading broadband networks and customer-centric culture, which enabled our strongest first quarter on record." He also highlighted the company's industry-leading postpaid mobile phone churn of 0.91 percent, emphasizing the potency of Telus' operational execution and product offerings.
The company reiterated its 2024 financial targets, including TTech Operating Revenues and Adjusted EBITDA growth of 2 to 4 percent and 5.5 to 7.5 percent, respectively, with Consolidated Capital Expenditures of approximately $2.6 billion and Free Cash Flow of approximately $2.3 billion.
Executive Vice-president and CFO Doug French added insight into the financial performance, "In the first quarter of 2024, our team navigated a highly competitive environment across mobility and fixed to deliver healthy operational and financial results." He also noted the company's focus on efficiency and effectiveness to drive significant cost reductions on a permanent basis.
Telus announced a quarterly dividend increase of 7.0 percent, reflecting confidence in its operational and financial results and the sustainability of its dividend growth program. The dividend growth is supported by Adjusted EBITDA growth outlook and strong annual free cash flow expansion.
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