TELUS Corporation TU reported third-quarter 2024 adjusted earnings per share (EPS) of C$0.28 (21 cents) compared with C$0.25 in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 23.5%.

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Quarterly total operating revenues increased 1.8% year over year to C$5,099 million ($3,738 million) owing to higher service revenues in the TELUS technology solutions (TTech) segment offset by lower service revenues in the TELUS digital experience segment (TELUS Digital). The top line beat the Zacks Consensus Estimate of $3,711 million. 

The company’s operating revenues (arising from contracts with customers) were C$5,042 million, up 1% year over year. TELUS reported 347,000 net customer additions in the third quarter, marking a 14.5% year-over-year decrease. This includes strong mobile phone net additions of 130,000, 159,000 connected device additions and 58,000 total fixed net additions.

In response to the results, TU’s shares were up 3.2%, and the trading session closed at $15.66 on Nov. 8. Shares of the company have lost 9.1% in the past year compared with the sub-industry’s decline of 3.5%.

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Quarterly Segmental Results

In the third quarter, TTech revenues and other income rose 2.7% year over year to C$4,424 million. TTech operating revenues (arising from contracts with customers) increased 1.9% year-over-year to $4,367 million. 

The expansion is driven by healthy subscriber growth in mobile networks, home Internet, TV and security services, along with growth in health, agriculture and consumer goods services. Revenues from managed and unmanaged data services is also on the rise. However, the growth is partly offset by lower prices in mobile, Internet and security services, along with decline in TV and fixed legacy voice services sales.

Mobile network revenues inched up 0.7% year over year to C$1,766 million, driven by a higher mobile phone subscriber count and strength in IoT connections amid lower mobile phone ARPU.

Fixed voice services revenues declined 6.3% year over year to C$179 million as a result of the ongoing fall in legacy voice revenues due to technological substitution and price plan changes. The decrease was partly offset by the success of bundled product offerings and the company’s retention efforts.

TELUS Corporation Price, Consensus and EPS Surprise

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Health services revenues increased 4% year over year to C$439 million due to growth from pharmacy management software upgrades, a boost in virtual pharmacy sales, expansion of employee assistance programs and rising demand for health benefits management and retirement solutions.

The segment’s adjusted EBITDA of C$1,723 million increased 5.5% year over year, owing to broad-based cost-reduction efforts, subscriber growth and a rise in health services revenues. Adjusted EBITDA margin improved 110 basis points year over year to 39%.

TELUS Digital operating revenues (arising from contracts with customers) fell 4.4% to C$675 million due to lower revenues from a leading social media customer and other technology customers and a reduction in revenues in other industry verticals, notably in communications (excluding the TTech segment), eCommerce and banking, financial services and insurance against a tough macroeconomic backdrop. The decline was partially offset by growth in services provided to existing clients, including Google, as well as new clients added since the same period in the prior year and favorable forex impacts.

TELUS Digital's operating revenues and other income inched up 0.9% to C$897 million. The segment’s adjusted EBITDA of C$131 million increased 30% from the year-ago quarter.