Telus' Q4 profit up 4.9 per cent as TV, Internet subscribers help drive growth

By LuAnn LaSalle, the Canadian Press

Telus (TSX:T) increased its quarterly profit by almost five per cent, helped by more TV and high-speed Internet subscribers and continued smartphone growth but results still fell short of analyst expectations.

The Vancouver-based telecommunications company reported that fourth-quarter net income was $237 million, a 4.9 per cent increase from $226 million in the quarter a year earlier.

On an earnings per share basis, the results were equal to 76 cents per share — below average analyst expectations of 78 cents per share, according to a poll by Thomson Reuters — but above the 70 cents per share earned a year ago.

"Telus' fourth quarter and full year 2011 results reflect the success of our strategy of investing in our broadband technology and client experience across our wireless, TV and high-speed Internet services," said president and CEO Darren Entwistle in a news release.

In its TV operations, the company added 56,000 subscribers in the quarter, an increase of 17 per cent, bringing the total customer base to 509,000 for its Internet Protocol-based Optik TV service.

Telus competes with cable provider Shaw Communications Inc. (TSX:SJB – News) in Western Canada.

For the quarter, Telus said it added 148,000 postpaid subscribers, often smartphone users, in the period, which helped boost wireless data revenue by 43 per cent. Telus said 53 per cent of its postpaid subscriber base now uses smartphones.

Revenue for Telus increased 5.3 per cent to $2.69 billion from $2.55 billion.

Telus also said it added 24,000 new high-speed Internet customers in its latest quarter, up 33 per cent.

The Vancouver telecom company also announced it has launched its next-generation wireless network with Long-Term Evolution (LTE) technology in major urban markets that's geared to data used by customers. the network allows faster download times when surfing the web, reading emails, storing songs or watching movies on mobile devices.

"we look forward to introducing more devices and expanding our 4G LTE network coverage to reach more than 25 million Canadians by the end of 2012," Entwistle said.

Bell and Rogers (TSX:RCI-B.TO – News) launched their next-generation LTE networks last year.

Telus also said the National Defence Department extended its network services contract, valued at more than $250 million, until 2016. Telus provides telecommunications services including voice, data, video and IP solutions to DND in Canada and internationally.

The company's postpaid subscriber growth of 148,000 bested UBS analyst Phillip Huang's estimate of 122,000 in the quarter ahead of the quarterly results.

Huang noted that Telus is less exposed to Apple's iPhone and its associated costs.

"while iPhone 4S was obviously the key driver of handset subsidy costs for the industry in Q4, we believe Telus’ wireless margin will reflect a smaller impact relative to Rogers given its smaller existing iPhone customer base and thus less upgrade demand," he said in a recent note.

Huang said Optik TV is reaching scale and had estimated 52,000 new TV subscribers, which Telus beat. He had estimated 25,000 new high-speed Internet customers, which Telus fell short of by 1,000.

Shares in Telus were down $1.10, or 1.9 per cent, to $56.11 in morning trading on the Toronto Stock Exchange.

Telus' Q4 profit up 4.9 per cent as TV, Internet subscribers help drive growth

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