Telus Posts Higher Profit in Q3; Raises Dividend

Telus (T) reported higher profits and revenues in the third quarter. The Canadian telecom company reported 135,000 net additions of mobile customers and 75,000 wireline customers.

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Revenues & Earnings

Operating revenues and other income came in at C$4.25 billion for the quarter ended September 30, up 6.8% from C$3.98 billion in the prior-year quarter. EBITDA increased 7.6% to C$1.50 billion, while adjusted EBITDA increased 7.1% to C$1.56 billion.

Net income was C$358 million (C$0.25 per share) in the third quarter of 2021, an increase of 11.5% from C$321 million (C$0.24 per share) in the same quarter last year.

Excluding some items, Telus’ earnings came in at C$0.29 per share in Q3 2021, up from C$0.28 per share in Q3 2020.

Mobile phone average billing per unit (ABPU) was C$70.99 in the third quarter of 2021, relatively unchanged as compared to the prior-year quarter.

Dividend Hike

Telus president and CEO Darren Entwistle said, “Our robust performance reflects the effectiveness of our globally leading customer-centric culture and broadband networks, underpinned by our highly engaged team and their passion for delivering outstanding connected experiences. This contributed to leading total customer net additions of 320,000, an all-time quarterly record for TELUS, underpinned by industry-best client loyalty across our key mobile and fixed product lines. Notably, blended mobile phone, PureFibre internet, Optik TV, Security and voice churn are all below one per cent year-to-date.”

Telus announced a quarterly dividend increase to C$0.3274 per share, up from C$0.3112 per share. (See Insiders’ Hot Stocks on TipRanks)

Wall Street’s Take

On October 26, Canaccord Genuity analyst Aravinda Galappatthige reiterated a Buy rating on the stock with a C$32 price target. This implies 10.7% upside potential.

Overall, consensus on the Street is that Telus is a Strong Buy based on five Buys. The average Telus price target of C$32.12 implies an upside potential of about 11.2% to current levels.