Telus (TSX:T), one of Canada's big three telecom companies, posted a 12% drop in its third quarter profits on Friday, but beat analyst expectations due to strong wireless growth, leading to an upgrade in its outlook for the year.
In the third quarter, the company reported net income of $247 million, or $0.77 per share, down from $280 million, or $0.88 per share, in the same period of last year. Telus said the decline was due to costs associated with the early retirement of 2011 loan notes, as well as regulatory charges.
Excluding these items, adjusted net income was $286 million, or $0.89 per share, up 7.5% and 6%, respectively, on the year-earlier quarter. On this basis, analysts expected $0.76 per share.
Revenues increased slightly by 2% to $2.46 billion during the period, as growth in wireless and wireline data revenues more than offset declines in traditional voice services, the company said.
At quarter-end, total customer connections were 12.1 million, compared with 11.8 million a year earlier.
Vancouver-based Telus added 22% more wireless customers in the third quarter than it did the previous year for total net additions of 153,000, including 132,000 postpaid customers.
External wireless revenues increased by 6.3% to $1.28 billion during the period, while sales from data jumped 29% on greater usage of smartphones.
In the wireline segment, TV net subscriber additions were a record 38,000 in Q3, an increase of 73% over the same period last year due to the launch of the Optik TV brand in June, while high-speed internet additions rose by 67%.
Telus said its TV subscriber base stood at 266,000 at the end of September, up 94% from a year earlier.
Free cash flow increased 27% in the quarter to $339 million.
Based on its results, the company has decided to initiate a second 5% increase this year in its quarterly dividend to $0.525 per share. Telus also expects earnings per share for the year to be between $3.10 to $3.30, up from its previous forecast of $2.90 to $3.30.
The company rallied more than 2% on Friday, trading at $45.53 as of 12:23pm ET.
Disclosure: No positions