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4-Traders Homepage  >  Equities  >  Toronto Stock Exchange  >  Shaw Communications Inc    SJR.B   CA82028K2002

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Shaw Communications : Telus misses profit estimates as it spends heavily to add subscribers

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11/09/2017 | 07:13pm CET
A Telus Corporation sign is pictured in Ottawa

Canadian telecom company Telus Corp (>> TELUS Corporation) on Thursday reported a lower-than-expected quarterly profit as it spent heavily to expand its wireless and fiber-optic networks in a bid to add more subscribers in a fiercely competitive industry.

Canadian telecom company Telus Corp (>> TELUS Corporation) on Thursday reported a lower-than-expected quarterly profit as it spent heavily to expand its wireless and fiber-optic networks in a bid to add more subscribers in a fiercely competitive industry.

Vancouver-based Telus faces increasing competition from Shaw Communications (>> Shaw Communications Inc), which has rolled out new internet and television services and is also building a low-cost wireless business.

Telus said on Thursday its capital expenditure for wireline unit rose 19 percent in the quarter, mainly as it boosted its fiber-optic network. Total operating expenses rose 3.6 percent.

Shaw also reported last month an increase in costs that squeezed its margins.

Telus said it added about 115,000 new wireless postpaid customers in the quarter. That compares with 99,000 additions estimated by RBC Capital Markets and 93,000 by Barclays.

The company's postpaid churn rate, or percentage of subscribers who discontinued services, also fell to 0.86 percent and was below the consensus estimate of a 0.9 percent drop, according to Barclays analyst Phillip Huang.

Average revenue per user (ARPU) for wireless services rose 3 percent in the quarter.

"Our capital investments have been instrumental in the success of our wireless and wireline growth strategy, which has now delivered 28 consecutive quarters of wireless ARPU growth and 20 successive quarters of wireline EBITDA growth," Chief Executive Darren Entwistle said.

Telus said it expected capital expenditure of about C$2.85 billion ($2.25 billion) for 2018, slightly below its estimated capital expenditure of about C$3 billion in the current year.

Excluding items, the company reported a profit of 66 Canadian cents per share, missing the average analyst estimate of 69 Canadian cents per share, according to Thomson Reuters I/B/E/S.

Net income attributable to shareholders rose to C$367 million, or 62 Canadian cents per share, in the three months ended Sept. 30 from C$348 million, or 59 Canadian cents per share, a year earlier.

Operating revenue rose 4 percent to C$3.37 billion.

Shares of the company were marginally up at C$47.32.

(Reporting by Taenaz Shakir; Editing by Anil D'Silva)

By Taenaz Shakir

Stocks treated in this article : Shaw Communications Inc, TELUS Corporation
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Financials ( CAD)
Sales 2018 5 090 M
EBIT 2018 1 038 M
Net income 2018 690 M
Debt 2018 4 019 M
Yield 2018 4,45%
P/E ratio 2018 22,06
P/E ratio 2019 19,64
EV / Sales 2018 3,44x
EV / Sales 2019 3,29x
Capitalization 13 478 M
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Technical analysis trends SHAW COMMUNICATIONS INC
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Mean consensus HOLD
Number of Analysts 16
Average target price 29,2  CAD
Spread / Average Target 8,5%
EPS Revisions
Managers
NameTitle
Bradley S. Shaw Chief Executive Officer & Non-Independent Director
Jay Mehr President
James Robert Shaw Executive Chairman
Ron McKenzie Chief Operating Officer & Senior Vice President
Vito Culmone Chief Financial Officer & Executive Vice President
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