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TELUS (TU) Q1 Earnings Top Estimates, Revenues Increase Y/Y
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TELUS Corporation (TU - Free Report) reported adjusted earnings per share of C$0.30 per share (24 cents per share) in first-quarter 2022 compared with C$0.27 per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of 23 cents.
Driven by subscriber growth and double-digit revenue growth across TELUS International, TELUS Health and TELUS Agriculture segments, quarterly total operating revenues increased 6.4% year over year to C$4,282 million ($3,381 million). However, the top line missed the consensus estimate of $3,408 million.
The upside reflects higher demand for premium bundled offerings and strong customer retention efforts that resulted in total customer net additions of 148,000 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 first quarter, TTech revenues rose 4.2% year over year to C$3,642 million, primarily driven by higher mobile network revenues and solid performance across fixed data services. Mobile network revenues rose 4.9% year over year to C$1,577 million due to increasing mobile phone ARPU and subscriber growth.
Fixed voice services revenues declined 6.5% year over year to C$200 million. This reflects the ongoing decline in legacy voice revenues from technological substitution and price plan changes.
Health services revenues increased 13.8% to C$140 million, driven by the positive impact of business acquisitions, higher uptake of virtual care solutions and health benefits management sservices growth.
The segment’s adjusted EBITDA of C$1,435 million increased 5.1% year over year, led by an increase in direct contribution from mobile and fixed products and services. Adjusted EBITDA margin came in at 39.4% compared with 39.1% in the year-ago quarter.
Revenues from TELUS International (DLCX) soared 18.8% year over year to C$759 million. Operating revenues (arising from contracts with customers) rose 20.4% to C$644 million, primarily driven by business acquisitions within the tech and games sectors and organic growth in customers.
The segment’s adjusted EBITDA of C$173 million increased 25.3% from the year-ago quarter’s figure. Adjusted EBITDA margin was 22.7% compared with 21.6% in the prior-year quarter.
TELUS PureFibre network covered more than 2.8 million premises at the end of first-quarter 2022, up from nearly 2.5 million premises in the year-ago quarter.
Other Details
Adjusted EBITDA increased 7% year over year to C$1,608 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 first quarter, TELUS generated C$1,135 million of cash from operating activities compared with C$939 million in the year-ago quarter. Free cash flow for the same period increased 29.3% to C$415 million.
Capital expenditures (excluding spectrum licenses) soared 21.6% year over year to C$833 million on the back of increased 5G investments, fast-tracked investments in broadband build, enhanced product development and digitization to increase system capacity and higher purchase of equipment to support subscriber growth.
As of Mar 31, 2022, the company had C$774 million of net cash and temporary investments with C$18,415 million in long-term debt compared with C$723 million and C$17,925 million, respectively as of Dec 31, 2022.
2022 Outlook
TELUS expects operating revenues and adjusted EBITDA to grow in the range of 8-10%. Free cash flow is anticipated to be between $1 billion and $1.2 billion. The company is confident in boosting its operating momentum through end-to-end design and build capabilities while delivering premium digital customer experiences.
The Zacks Consensus Estimate for Flex’s fiscal 2023 earnings is pegged at $2.15 per share, up 6.4% in the past 60 days. The long-term earnings growth rate is pegged at 14.9%.
Flex earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 21.1%. Shares of FLEX have declined 7.6% in the past year.
The Zacks Consensus Estimate for Jabil fiscal 2022 earnings is pegged at $7.25 per share, up 10.2% in the past 60 days. The long-term earnings growth rate is 12%.
Jabil earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 13.5%. Shares of JBL have gained 9.4% in the past year.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.67 per share, up 0.5% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 15.6%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 1.9%. Shares of AVGO have increased 33% in the past year.
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TELUS (TU) Q1 Earnings Top Estimates, Revenues Increase Y/Y
TELUS Corporation (TU - Free Report) reported adjusted earnings per share of C$0.30 per share (24 cents per share) in first-quarter 2022 compared with C$0.27 per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of 23 cents.
Driven by subscriber growth and double-digit revenue growth across TELUS International, TELUS Health and TELUS Agriculture segments, quarterly total operating revenues increased 6.4% year over year to C$4,282 million ($3,381 million). However, the top line missed the consensus estimate of $3,408 million.
The upside reflects higher demand for premium bundled offerings and strong customer retention efforts that resulted in total customer net additions of 148,000 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 first quarter, TTech revenues rose 4.2% year over year to C$3,642 million, primarily driven by higher mobile network revenues and solid performance across fixed data services. Mobile network revenues rose 4.9% year over year to C$1,577 million due to increasing mobile phone ARPU and subscriber growth.
Fixed voice services revenues declined 6.5% year over year to C$200 million. This reflects the ongoing decline in legacy voice revenues from technological substitution and price plan changes.
Health services revenues increased 13.8% to C$140 million, driven by the positive impact of business acquisitions, higher uptake of virtual care solutions and health benefits management sservices growth.
The segment’s adjusted EBITDA of C$1,435 million increased 5.1% year over year, led by an increase in direct contribution from mobile and fixed products and services. Adjusted EBITDA margin came in at 39.4% compared with 39.1% in the year-ago quarter.
Revenues from TELUS International (DLCX) soared 18.8% year over year to C$759 million. Operating revenues (arising from contracts with customers) rose 20.4% to C$644 million, primarily driven by business acquisitions within the tech and games sectors and organic growth in customers.
The segment’s adjusted EBITDA of C$173 million increased 25.3% from the year-ago quarter’s figure. Adjusted EBITDA margin was 22.7% compared with 21.6% in the prior-year quarter.
TELUS PureFibre network covered more than 2.8 million premises at the end of first-quarter 2022, up from nearly 2.5 million premises in the year-ago quarter.
Other Details
Adjusted EBITDA increased 7% year over year to C$1,608 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 first quarter, TELUS generated C$1,135 million of cash from operating activities compared with C$939 million in the year-ago quarter. Free cash flow for the same period increased 29.3% to C$415 million.
Capital expenditures (excluding spectrum licenses) soared 21.6% year over year to C$833 million on the back of increased 5G investments, fast-tracked investments in broadband build, enhanced product development and digitization to increase system capacity and higher purchase of equipment to support subscriber growth.
As of Mar 31, 2022, the company had C$774 million of net cash and temporary investments with C$18,415 million in long-term debt compared with C$723 million and C$17,925 million, respectively as of Dec 31, 2022.
2022 Outlook
TELUS expects operating revenues and adjusted EBITDA to grow in the range of 8-10%. Free cash flow is anticipated to be between $1 billion and $1.2 billion. The company is confident in boosting its operating momentum through end-to-end design and build capabilities while delivering premium digital customer experiences.
Zacks Rank & Stocks to Consider
TELUS currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology sector are Flex (FLEX - Free Report) , Jabil (JBL - Free Report) and Broadcom (AVGO - Free Report) . Flex and Jabil sport a Zacks Rank #1 (Strong Buy), while Broadcom carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Flex’s fiscal 2023 earnings is pegged at $2.15 per share, up 6.4% in the past 60 days. The long-term earnings growth rate is pegged at 14.9%.
Flex earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 21.1%. Shares of FLEX have declined 7.6% in the past year.
The Zacks Consensus Estimate for Jabil fiscal 2022 earnings is pegged at $7.25 per share, up 10.2% in the past 60 days. The long-term earnings growth rate is 12%.
Jabil earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 13.5%. Shares of JBL have gained 9.4% in the past year.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.67 per share, up 0.5% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 15.6%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 1.9%. Shares of AVGO have increased 33% in the past year.