Aug 3, 2012 / 7:03 am
Telus Corp. (TSX:T) says its 2012 revenue picture is shaping up to be a better than expected, the Vancouver-based company announced Friday along with second-quarter results that largely met expectations.
The national telecom company, headquartered in Vancouver, had $2.7 billion in revenue during the second quarter, a four per cent increase over the same time last year.
The second-quarter growth was due primarily to the strength of the company's wireless business, which operates under the Telus and Koodo brands.
The telecom company's net income was $328 million, up 1.2 per cent from the same time last year. Earnings per share rose to $1.01 from 99 cents.
Analyst estimates compiled by Thomson Reuters pegged earnings per share at $1 of net income and $1.01 per share on an adjusted basis. Revenue was expected to come in at $2.67 billion.
Telus also said Friday it is raising its revenue target for the year by $50 million, due to better-than-expected performance at its wireline segment.
The growth in wireline revenue will come at a cost, however, reducing that segment's contribution to EBITDA (earnings before interest, taxes, depreciation and amortization) by $50 million compared with the previous estimate.
However, Telus says EBITDA at the wireless segment is now expected to be $100 million higher than previously projected, resulting in an overall improvement of $50 million.
"Our second quarter results continue to demonstrate that our focus on investing in our broadband data networks and services, whilst providing a differentiated customer experience, continues to pay off in the competitive Canadian marketplace," Telus chief executive Darren Entwistle said in the announcement.
Telus is in a battle with U.S. hedge fund Mason Capital Management to eliminate its two classes of shares for one class of common voting shares, which Mason opposes.
Mason Capital bought up almost 20 per cent of Telus after the Vancouver telecom company announced it would hold a shareholder vote on converting its non-voting shares into a common class of voting shares.
The hedge fund also shorted the company's non-voting shares, which historically traded for less than the voting shares but rose in anticipation of the conversion. Short sellers make a profit when the stock price falls.
Telus was forced to withdraw its proposal to have a single class of common shares after acknowledging that Mason Capital would have defeated the plan in a shareholder vote in May.
New York-based Mason asked the Supreme Court of British Columbia to order Telus to provide unredacted copies of the proxies submitted ahead of the May vote on whether to eliminate the company's dual-class share structure.
Telus is also one of the few major telecom companies that has said it won't pursue a strategy of buying up media properties to give it content for its online and mobile phone platforms.
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