Telus Corp. raised its dividend as it reported a profit of $551 million in its latest quarter, up from $358 million in the same period last year.
The telecommunications company saw the strongest customer gains in more than a decade, with net wireless up 150,000 or 11 per cent from the same quarter last year. Its wireline customers were also up, with 73,000 net additions.
"We've really focused on bundling of our products with our other high-value services. And we've seen a significant amount of immigration in Canada. So a lot of our loading has been down those paths," said Telus CFO Doug French in an interview.
He didn't say whether Rogers Communications Inc.'s service outage in July helped drive some of the customer growth.
Meanwhile, Telus saw internet net additions of 36,000, a decrease of 10,000 over the prior year.
The company said the decrease was due to "modestly higher churn," and noted inflationary pressures have consumers rethinking some purchasing decisions. The company saw TV net additions of 18,000, an increase of 8,000 over the prior year.
Telus Health services revenue increased by $95 million or 73 per cent in the third quarter, driven by the acquisition of LifeWorks -- formerly Morneau Shepell -- on Sept. 1, 2022 and the continued adoption of virtual care.
"The integration (of LifeWorks) is going very well. We closed the deal about two months earlier than we had anticipated by getting early regulatory approval," French said.
"I would say it's an early start, a good running start, and some early revenue opportunities."
With recession risks looming and ongoing inflationary pressures, French said the company is confident in its diversified portfolio.
"We built assets that are relevant and important to not just Canadians, but a lot of our customers around the world. And when you look at health care, agriculture, connectivity, and you look at the fact that we roll out all of our spectrum to rural Canada where connectivity is needed the most, those services are required in all times, including in a recessionary period," he said.
However, the company's digital consulting business, Telus International, warned of revenue headwinds in the fourth quarter driven by "softer than expected client demand and longer sales cycles" reflecting the impact of prolonged macroeconomic uncertainties.
Telus said its profit amounted to 37 cents per share for the quarter ended Sept. 30, up from 25 cents per share a year ago.
Operating revenue and other income rose to $4.67 billion compared with $4.25 billion in the same quarter last year.
On an adjusted basis, Telus said it earned 34 cents per share in its latest quarter, up from 29 cents per share last year.
Analysts on average had expected an adjusted profit of 32 cents per share, according to estimates compiled by financial markets data firm Refinitiv.
Telus said it will now pay a quarterly dividend of 35.11 cents per share, up from 32.74 cents per share.
Desjardins analyst Jerome Dubreuil said in a note to clients that the recent acquisitions of LifeWorks and U.S. tech company WillowTree doesn't appear to be preventing Telus from distributing capital back to shareholders and views the company's dividend increase "positively."
"Our robust performance reflects the chemistry of our globally leading broadband networks and customer-centric culture, which enabled our strongest quarter on record, with total customer net additions of 347,000, up more than 8 per cent, year-over-year," Darren Entwistle, Telus president and CEO, said in a statement attached to the company's earnings release.
This report by The Canadian Press was first published Nov. 4, 2022.
Companies in this story: (TSX:T)
Adena Ali, The Canadian Press
