Telus Corp. T-T has reported higher fourth-quarter revenue and profit, adding more internet customers than expected while issuing upbeat financial forecasts for 2025.
The Vancouver-based telco expects growth of between 2 per cent and 4 per cent in 2025, ahead of analyst consensus of 1.2 per cent, according to the Royal Bank of Canada. The company’s business includes mobile, internet, enterprise, health and agriculture and consumer services segments.
It also expects free cash flow growth of 8.5 per cent to $2.2-billion for the year, above analyst consensus of $2.1-billion. The company is aiming to reduce its leverage by the end of 2027, and plans to lower the discount on its dividend reinvestment plan (DRIP) in 2026 and remove the discount the following year.
In an interview Thursday morning, Telus chief financial officer Doug French said that the discount was first added to the DRIP when the company needed cash for spectrum auctions. With those auctions set to end in 2026, he said, the company’s immediate cash needs are declining. As a result, it can now prioritize paying investors in cash rather than issuing new shares, which would dilute existing shareholder value.
Telus also estimated it would spend $400-million on restructuring in 2025, as the company pushes to cut costs in order to increase profitability.
Mr. French said that amount includes costs associated with real estate consolidation, artificial intelligence development and potential job cuts. He confirmed that it also covers the voluntary severance packages offered to 700 employees earlier this month.
The severance offers, followed by BCE Inc.’s BCE-T buyout offer to 1,200 employees last week, stem from efficiency gains in areas including more reliable networks, which have reduced the need for certain positions.
RBC analyst Drew McReynolds called the company’s estimate for the coming year “the strongest 2025 guidance among Canadian peers by a notable margin.”
Shares of Telus were up about 3 per cent in morning trading.
Telus reported fourth-quarter revenue of $5.4-billion, up 3.5 per cent year-over-year and beating S&P Capital IQ analyst consensus of $5.23-billion. Telus said the increase was attributable to higher service revenue and income from real estate and copper sales. (The company has been selling off its copper wiring as it transitions to fibre technology.) Those gains were offset by lower earnings from its customer services outsourcing business, Telus International Inc., of which Telus is the controlling shareholder.
The company posted profit of $320-million or 24 cents per share in the three-month period ended Dec. 31, up 3.2 per cent from the same period a year earlier. Analysts were expecting earnings of 19 cents per share.
But the company only added 70,000 net new mobile phone customers during the quarter, below analyst consensus of 81,000, and compared with 126,000 a year earlier. This compared to 52,000 for BCE and 95,000 for Rogers Communications Inc. RCI-B-T, respectively.
“Telus reported results which echoed the results of BCE and Rogers, showing the pressure caused by pricing on financial results,” said Scotiabank analyst Mager Yaghi, calling the company’s wireless results “decent” given the competitive context.
The company added a net 37,000 internet customers, slightly up from 36,000 last year and beating analyst consensus of 31,000.
The industry has faced several quarters of heightened mobile and internet competition, and headwinds from falling immigration levels resulting from federal policies, historically a source of new customers for the telecoms.
This continues to have an effect on the telecom’s earnings, as many have discounted their offerings to win customers from rivals. While Mr. French said that Telus is focusing on adding profitable subscriptions, the company’s average revenue per user declined by 3.6 per cent in the quarter.
In its last quarter, Telus continued to expand its fibre internet services in Ontario and Quebec over Bell’s network, using the telecom regulator’s fibre resale policy that currently allows Canada’s three largest telcos to access each other’s networks at mandated rates.
The issue of whether these companies should be able to do so has been hotly contested in the industry, with BCE and Rogers asking the regulator to prohibit it. Those companies say their rivals should not be able to benefit from the costly investments made to build the networks. The Canadian Radio-television and Telecommunications Commission is due to make a final decision on the matter by the end of summer.