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TELUS (TU) Q3 Earnings & Revenues Top Estimates, Increase Y/Y
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TELUS Corporation (TU - Free Report) reported adjusted earnings per share of C$0.34 per share (26 cents per share) in third-quarter 2022 compared with C$0.29 per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of 25 cents.
Quarterly total operating revenues increased 9.9% year over year to C$4,671 million ($3,581 million) owing to high service revenue in TELUS technology solutions and TELUS International. The top line beat the consensus estimate of $3,513 million.
The upside reflects higher demand for premium bundled offerings and strong customer retention efforts, resulting in total customer net additions of 347,000 in the reported quarter.
TELUS Corporation Price, Consensus and EPS Surprise
TELUS reports revenues in two segments — TELUS technology solutions (TTech) and Digitally-led customer experiences — TELUS International (DLCX).
In the third quarter, TTech revenues (arising from contracts with customers) rose 8.6% year over year to C$3,973 million, primarily driven by higher mobile network revenues and solid performance across fixed data, agriculture, customer and health services. Mobile network revenues rose 6.8% year over year to C$1,696 million due to increasing mobile phone and connected device subscriber growth.
Fixed voice services revenues declined 4.8% year over year to C$198 million. This reflects the ongoing decline in legacy voice revenues from technological substitution and price plan changes. This was partly offset by strong demand for bundled product offerings and migration from legacy to IP service offerings.
Health services revenues increased 73.1% to C$225 million, driven by the positive impact of business acquisitions, higher uptake of virtual care solutions and rapid adoption of collaborative health records.
The segment’s adjusted EBITDA of C$1,524 million increased 8.1% year over year, led by an increase in direct contribution from mobile and fixed products and services, partly offset by higher employee costs and higher goods and services purchased. Adjusted EBITDA margin came in at 38% compared with 38.4% in the year-ago quarter.
Revenues from DLCX soared 14.7% year over year to C$803 million. Operating revenues (arising from contracts with customers) rose 13.6% to C$667 million, primarily driven by growth within the tech and games sectors and banking, financial and insurance services.
The segment’s adjusted EBITDA of C$200 million increased 35.5% from the year-ago quarter’s figure. Adjusted EBITDA margin was 24.9% compared with 21.1% in the prior-year quarter.
TELUS PureFibre network covered more than 2.9 million premises at the end of third-quarter 2022, up from nearly 2.6 million premises in the year-ago quarter.
Other Details
Adjusted EBITDA increased 10.7% year over year to C$1,724 million, driven by higher Internet and data service revenues, higher mobile revenues from an accretive subscriber base and increased contribution from the DLCX acquisition.
Cash Flow & Liquidity
In the third quarter, TELUS generated C$1,300 million of cash from operating activities compared with C$1,309 million in the year-ago quarter. The free cash flow for the same period increased 63.1% to C$331 million.
Capital expenditures (excluding spectrum licenses) declined 6.7% year over year to C$925 million due to a planned slowdown in fiber network investments.
As of Sep 30, 2022, the company had C$1,440 million of net cash and temporary investments with C$20,927 million in long-term debt compared with C$382 million and C$21,628 million, respectively, as of Jun 30, 2022.
2022 Outlook
TELUS expects operating revenues of approximately 8% compared with the previous guidance of 8-10%.
TELUS expects adjusted EBITDA to grow in the range of 9-10% compared with the previous guidance of 8-10%. The free cash flow is anticipated to be approximately $1.3 billion compared with the previous guidance of $1-$1.2 billion.
Capital expenditures (excluding spectrum licenses) are expected to be $3.475 billion compared with the previous guidance of $3.4 billion.
The Zacks Consensus Estimate for InterDigital’s 2022 earnings is pegged at $2.45 per share, up 2.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
InterDigital’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 69.3%. Shares of IDCC have decreased 31.6% in the past year.
The Zacks Consensus Estimate for PSTG 2022 earnings is pegged at $1.18 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have increased 6.2% in the past year.
The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8 in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have decreased 0.3% in the past year.
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TELUS (TU) Q3 Earnings & Revenues Top Estimates, Increase Y/Y
TELUS Corporation (TU - Free Report) reported adjusted earnings per share of C$0.34 per share (26 cents per share) in third-quarter 2022 compared with C$0.29 per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of 25 cents.
Quarterly total operating revenues increased 9.9% year over year to C$4,671 million ($3,581 million) owing to high service revenue in TELUS technology solutions and TELUS International. The top line beat the consensus estimate of $3,513 million.
The upside reflects higher demand for premium bundled offerings and strong customer retention efforts, resulting in total customer net additions of 347,000 in the reported quarter.
TELUS Corporation Price, Consensus and EPS Surprise
TELUS Corporation price-consensus-eps-surprise-chart | TELUS Corporation Quote
Quarterly Segmental Results
TELUS reports revenues in two segments — TELUS technology solutions (TTech) and Digitally-led customer experiences — TELUS International (DLCX).
In the third quarter, TTech revenues (arising from contracts with customers) rose 8.6% year over year to C$3,973 million, primarily driven by higher mobile network revenues and solid performance across fixed data, agriculture, customer and health services. Mobile network revenues rose 6.8% year over year to C$1,696 million due to increasing mobile phone and connected device subscriber growth.
Fixed voice services revenues declined 4.8% year over year to C$198 million. This reflects the ongoing decline in legacy voice revenues from technological substitution and price plan changes. This was partly offset by strong demand for bundled product offerings and migration from legacy to IP service offerings.
Health services revenues increased 73.1% to C$225 million, driven by the positive impact of business acquisitions, higher uptake of virtual care solutions and rapid adoption of collaborative health records.
The segment’s adjusted EBITDA of C$1,524 million increased 8.1% year over year, led by an increase in direct contribution from mobile and fixed products and services, partly offset by higher employee costs and higher goods and services purchased. Adjusted EBITDA margin came in at 38% compared with 38.4% in the year-ago quarter.
Revenues from DLCX soared 14.7% year over year to C$803 million. Operating revenues (arising from contracts with customers) rose 13.6% to C$667 million, primarily driven by growth within the tech and games sectors and banking, financial and insurance services.
The segment’s adjusted EBITDA of C$200 million increased 35.5% from the year-ago quarter’s figure. Adjusted EBITDA margin was 24.9% compared with 21.1% in the prior-year quarter.
TELUS PureFibre network covered more than 2.9 million premises at the end of third-quarter 2022, up from nearly 2.6 million premises in the year-ago quarter.
Other Details
Adjusted EBITDA increased 10.7% year over year to C$1,724 million, driven by higher Internet and data service revenues, higher mobile revenues from an accretive subscriber base and increased contribution from the DLCX acquisition.
Cash Flow & Liquidity
In the third quarter, TELUS generated C$1,300 million of cash from operating activities compared with C$1,309 million in the year-ago quarter. The free cash flow for the same period increased 63.1% to C$331 million.
Capital expenditures (excluding spectrum licenses) declined 6.7% year over year to C$925 million due to a planned slowdown in fiber network investments.
As of Sep 30, 2022, the company had C$1,440 million of net cash and temporary investments with C$20,927 million in long-term debt compared with C$382 million and C$21,628 million, respectively, as of Jun 30, 2022.
2022 Outlook
TELUS expects operating revenues of approximately 8% compared with the previous guidance of 8-10%.
TELUS expects adjusted EBITDA to grow in the range of 9-10% compared with the previous guidance of 8-10%. The free cash flow is anticipated to be approximately $1.3 billion compared with the previous guidance of $1-$1.2 billion.
Capital expenditures (excluding spectrum licenses) are expected to be $3.475 billion compared with the previous guidance of $3.4 billion.
Zacks Rank & Stocks to Consider
TELUS currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are InterDigital (IDCC - Free Report) , Pure Storage (PSTG - Free Report) and Jabil (JBL - Free Report) . InterDigital and Jabil currently sport a Zacks Rank #1 (Strong Buy), whereas Pure Storage currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for InterDigital’s 2022 earnings is pegged at $2.45 per share, up 2.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
InterDigital’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 69.3%. Shares of IDCC have decreased 31.6% in the past year.
The Zacks Consensus Estimate for PSTG 2022 earnings is pegged at $1.18 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have increased 6.2% in the past year.
The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8 in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have decreased 0.3% in the past year.