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Telus posts higher Q1 profit, boosts dividend

By The Canadian Press

VANCOUVER - Telus Corp. (TSX:T) reported a higher first-quarter net profit of $377 million, up from $366 million in the compable year-earlier period on the strength of continued growth in wireless, TV and Internet services.

The profit translated into earnings of 60 cents per share diluted, up 9.1 per cent from 55 cents in the 2013 period.

Revenue rose five per cent to $2.9 billion compared with $2.75 billion in the same quarter of 2013.

Analysts' estimates for revenue were $2.87 billion on net earnings per share of 61 cents, according to data compiled by Thomson Reuters.

The telecommunications company also raised its quarterly dividend by two cents to 38 cents per share.

Telus said it added 48,000 net postpaid subscribers, usually smartphone customers on two-year contracts, in the quarter, down 18.6 per cent from 59,000 in the same quarter last year as the wireless market matures.

But it beat rivals Rogers (TSX:RCI.B), which added 2,000 and BCE (TSX:BCE) which added 34,000 in their respective first quarters.

On Wednesday, BCE Inc.'s chief executive George Cope blamed Canada's new wireless code of conduct for a drop in the company's wireless business. The federal regulatory agency introduced changes in December that allowed consumers to cancel their wireless contracts after two years - instead of three - without fees, as well as certain limits on roaming and excess data charges.

Cope said the move to two-year contracts pushed up prices.

Wireless network revenues increased by 5.3 per cent to $1.44 billion in the first quarter of 2014, compared to the same period a year ago.

Revenues in its wireline division, which includes TV, Internet and phone services, increased 4.4 per cent to $1.34 billion year-over-year.

Telus said net TV subscribers of 27,000 were lower by 7,000 from the same quarter last year. The total TV subscriber base of 842,000 increased by 130,000 or 18 per cent from a year ago.

High-speed Internet net additions of 21,000 increased by 5,000 over the same quarter a year ago. The high-speed subscriber base of 1.4 million is up 74,000 or 5.5 per cent from a year ago.

"Telus delivered strong revenue and profitable growth in the first quarter driven once again by strong results from both our wireless and wireline operations," chief executive Darren Entwistle said in a news release on Thursday.

Canaccord Genuity analyst Dvai Ghose said Telus had a "peer group leading" quarter with its wireless results. Telus reported a strong quarter in line with expectations, Ghose said in a research note.

RBC Capital Markets analyst Drew McReynolds also said Telus had another strong quarter across the board.

"Subscriber growth was the positive surprise in the quarter," he said in a note.

On Thursday, Entwistle steps down as chief executive when Telus holds its shareholder meeting in Vancouver.

He will be replaced by chief commercial officer Joe Natale.

Entwistle has been president and CEO for 14 years and will take on the executive chairman's role at the company he helped grow into one of Canada's three major telecommunications companies, alongside Rogers (TSX:RCI.B) and Bell (TSX:BCE).

But his influence in running the company he built from a regional telephone service into a multibillion national wireless player will remain.

Entwistle started his career at Bell, where his father worked, and went on to be president of U.K.-based Cable & Wireless Communications before returning to Canada to lead Telus.

He helped transform Telus by shelling out what was then considered a staggering $6.6 billion to buy Clearnet Communications, an early cellphone service provider, in 2000, just after he became CEO.

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