VANCOUVER – Third quarter revenue increased 4.5% to $2.31 billion compared to the third quarter of 2006, reports Telus this morning.
The performance in the quarter ended September 30th was driven by 9% growth in both wireless revenue and wireline data revenue, partially offset by ongoing declines in local and long distance wireline revenues. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) increased 3.6% to $987 million due to an increase in wireless EBITDA of 8%, while wireline EBITDA decreased by 1%.
Net income in the quarter was $410 million and earnings per share (EPS) were $1.24, up 28% and 32% respectively, says the press release. Net income included favourable tax related adjustments of approximately $93 million or 28 cents per share, compared to $30 million or nine cents a year ago, as well as a favourable expense recovery this quarter of $4.9 million or one cent per share after tax for options with a net-cash settlement feature. Also contributing to the increase in EPS were higher EBITDA, lower financing charges and a reduction in shares outstanding as a result of the repurchases pursuant to the normal course issuer bid. Excluding tax related adjustments in both periods
and the option expense recovery, net income was $312 million and EPS were $0.95, up 7.7% and 11%, respectively.
Free cash flow remained strong at $503 million, down 3% due to timing of cash interest payments and higher wireless capital expenditures. During the third quarter Telus continued to repurchase shares under its normal course issuer bid program, completing $232 million of share buy backs. Average shares outstanding were 3% lower than a year ago.
Full year 2007 guidance has been updated and includes a slightly lower consolidated revenue range of $9.125 to $9.175 billion, a narrowing of the consolidated EBITDA range (as adjusted) – now at $3.725 to $3.775 billion, as well as an increase in the EPS (as adjusted) range to $3.55 to $3.65.
"The third quarter results are a marked improvement compared to the second quarter due to Telus’ continued strength in wireless and data combined with improved efficiency of wireless marketing and retention. Also encouraging was a reduction in incremental costs and improved performance associated with the new wireline billing and client care system in Alberta,” said company president and CEO Darren Entwistle.
"We experienced a sequential quarterly increase of 17,000 high speed customer additions, as improved order fulfillment and system stability allowed us to renew our marketing efforts in Alberta during the third quarter. I was also pleased to observe that we generated higher wireless gross additions, whilst maintaining stable customer loyalty and retention and strong net customer additions of 135,000. This was achieved with reduced marketing costs of acquisition,” he added.
