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TELUS (TU) Q4 Earnings Miss Estimates, Revenues Rise Y/Y
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TELUS Corporation (TU - Free Report) reported adjusted earnings per share of C$0.23 per share (17 cents per share) in fourth-quarter 2022 compared with C$0.23 per share in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate of 21 cents.
Quarterly total operating revenues increased 3.8% year over year to C$5,058 million ($3,725.8 million) owing to high service revenue in TELUS technology solutions and TELUS International. The top line beat the consensus estimate of $3,682.9 million.
The upside reflects higher demand for premium bundled offerings and strong customer retention efforts, resulting in total customer net additions of 301,000 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 fourth quarter, TTech revenues (arising from contracts with customers) rose 3.1% year over year to C$4,368 million, primarily driven by higher mobile network revenues and solid performance across fixed data, agriculture, customer and health services. Mobile network revenues rose 6.5% year over year to C$1,695 million due to increasing mobile phone and connected device subscriber growth.
Fixed voice services revenues declined 6.3% year over year to C$194 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 C$270 million to C$411 million, driven by the positive impact of business acquisitions and higher uptake of virtual care solutions.
The segment’s adjusted EBITDA of C$1,479 million increased 9.9% year over year, owing to an increase in direct contribution. Adjusted EBITDA margin came in at 33.9% compared with 35.2% in the year-ago quarter.
Revenues from DLCX soared 12.9% year over year to C$855 million. Operating revenues (arising from contracts with customers) rose 8.8% to C$694 million, primarily driven by growth within the tech and games sectors.
The segment’s adjusted EBITDA of C$210 million increased 22.9% from the year-ago quarter’s figure. Adjusted EBITDA margin was 24.5% compared with 22.5% in the prior-year quarter.
TELUS PureFibre network covered more than 3 million premises at the end of fourth-quarter 2022, up from nearly 2.7 million premises in the year-ago quarter.
Other Details
Adjusted EBITDA increased 11.3% year over year to C$1,689 million, driven by higher mobile network and fixed data services revenues coupled with increased contributions from the LifeWorks and DLCX acquisition.
Cash Flow & Liquidity
In the fourth quarter, TELUS generated C$1,126 million of cash from operating activities compared with C$896 million in the year-ago quarter. The free cash flow for the same period increased C$280 million to C$323 million.
Capital expenditures (excluding spectrum licenses) declined 27.4% year over year to C$660 million due to a planned slowdown in fiber network investments and a decline in proprietary software licenses purchase.
As of Dec 31, 2022, the company had C$974 million of net cash and temporary investments with C$22,496 million in long-term debt compared with C$1,440 million and C$20,927 million, respectively, as of Sep 30, 2022.
2023 Outlook
TELUS expects operating revenues growth of approximately 11-14%
TELUS expects adjusted EBITDA to grow in the range of 9.5-11%. The free cash flow is anticipated to be approximately $2 billion.
Capital expenditures (excluding spectrum licenses) are expected to be $2.6 billion.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.38 per share, rising 0.2 in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have increased 4.3% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% 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 all the last four quarters, the average being 8.8%. Shares of JBL have increased 32.3% in the past year.
The Zacks Consensus Estimate for Bandwidth 2022 earnings is pegged at 37 cents per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 301.8%. Shares of the company have declined 57.7% in the past year
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TELUS (TU) Q4 Earnings Miss Estimates, Revenues Rise Y/Y
TELUS Corporation (TU - Free Report) reported adjusted earnings per share of C$0.23 per share (17 cents per share) in fourth-quarter 2022 compared with C$0.23 per share in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate of 21 cents.
Quarterly total operating revenues increased 3.8% year over year to C$5,058 million ($3,725.8 million) owing to high service revenue in TELUS technology solutions and TELUS International. The top line beat the consensus estimate of $3,682.9 million.
The upside reflects higher demand for premium bundled offerings and strong customer retention efforts, resulting in total customer net additions of 301,000 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 fourth quarter, TTech revenues (arising from contracts with customers) rose 3.1% year over year to C$4,368 million, primarily driven by higher mobile network revenues and solid performance across fixed data, agriculture, customer and health services. Mobile network revenues rose 6.5% year over year to C$1,695 million due to increasing mobile phone and connected device subscriber growth.
Fixed voice services revenues declined 6.3% year over year to C$194 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 C$270 million to C$411 million, driven by the positive impact of business acquisitions and higher uptake of virtual care solutions.
The segment’s adjusted EBITDA of C$1,479 million increased 9.9% year over year, owing to an increase in direct contribution. Adjusted EBITDA margin came in at 33.9% compared with 35.2% in the year-ago quarter.
Revenues from DLCX soared 12.9% year over year to C$855 million. Operating revenues (arising from contracts with customers) rose 8.8% to C$694 million, primarily driven by growth within the tech and games sectors.
The segment’s adjusted EBITDA of C$210 million increased 22.9% from the year-ago quarter’s figure. Adjusted EBITDA margin was 24.5% compared with 22.5% in the prior-year quarter.
TELUS PureFibre network covered more than 3 million premises at the end of fourth-quarter 2022, up from nearly 2.7 million premises in the year-ago quarter.
Other Details
Adjusted EBITDA increased 11.3% year over year to C$1,689 million, driven by higher mobile network and fixed data services revenues coupled with increased contributions from the LifeWorks and DLCX acquisition.
Cash Flow & Liquidity
In the fourth quarter, TELUS generated C$1,126 million of cash from operating activities compared with C$896 million in the year-ago quarter. The free cash flow for the same period increased C$280 million to C$323 million.
Capital expenditures (excluding spectrum licenses) declined 27.4% year over year to C$660 million due to a planned slowdown in fiber network investments and a decline in proprietary software licenses purchase.
As of Dec 31, 2022, the company had C$974 million of net cash and temporary investments with C$22,496 million in long-term debt compared with C$1,440 million and C$20,927 million, respectively, as of Sep 30, 2022.
2023 Outlook
TELUS expects operating revenues growth of approximately 11-14%
TELUS expects adjusted EBITDA to grow in the range of 9.5-11%. The free cash flow is anticipated to be approximately $2 billion.
Capital expenditures (excluding spectrum licenses) are expected to be $2.6 billion.
Zacks Rank & Stocks to Consider
TELUS currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Jabil (JBL - Free Report) and Bandwidth (BAND - Free Report) . Jabil sports a Zacks Rank #1 (Strong Buy), while Arista Networks and Bandwidth carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.38 per share, rising 0.2 in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have increased 4.3% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% 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 all the last four quarters, the average being 8.8%. Shares of JBL have increased 32.3% in the past year.
The Zacks Consensus Estimate for Bandwidth 2022 earnings is pegged at 37 cents per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 301.8%. Shares of the company have declined 57.7% in the past year