Telus Corporation, headquartered in Vancouver, British Columbia, has reported strong fourth-quarter earnings for 2024, showcasing resilience amid competitive pressures. The telecommunications giant announced net income of $255.9 million for the quarter, translating to earnings of 17 cents per share, slightly beating Wall Street expectations of 15 cents, as cited by Automated Insights.
Adjusted earnings, reflecting non-recurring items, were reported at 18 cents per share, consistent with figures from the same quarter last year. Telus also experienced revenue growth, posting $5.4 billion for Q4, up 3.5% from $5.2 billion year-over-year. This performance not only exceeded analysts' expectations of $5.23 billion but also highlighted the company’s ability to expand amid challenging market dynamics.
Despite these promising figures, the company added only 70,000 net new mobile phone customers during the quarter—below the analyst consensus of 81,000—marking a reduction from 126,000 additions the previous year. Compared to competitors like BCE Inc. and Rogers Communications, which added 52,000 and 95,000 new customers, respectively, Telus faces pressure to adjust its strategies to attract subscribers.
Analysts suggest these shortcomings reflect broader industry pressures, with pricing strategies impacting profitability. Scotiabank analyst Mager Yaghi noted this trend, stating, "Telus reported results which echoed the results of BCE and Rogers showing the pressure caused by pricing on financial results.”
Nevertheless, Telus’ outlook for 2025 remains optimistic. The company expects solid growth for its technology solutions business, projecting increases between 2% and 4%, surpassing the analyst consensus of 1.2%. RBC analyst Drew McReynolds remarked on this guidance as “the strongest 2025 guidance among Canadian peers by a notable margin,” indicating confidence from market analysts.
Free cash flow projections for the upcoming year also look promising, with Telus targeting growth of 8.5%, reaching $2.2 billion—ahead of the consensus of $2.1 billion. To sustain this upward momentum, Telus plans to invest significantly as part of its restructuring efforts. Doug French, the company’s CFO, outlined plans to allocate $400 million for restructuring, focusing on cost reductions through initiatives like real estate consolidation and artificial intelligence development.
One interesting development is Telus’ dividend reinvestment plan (DRIP), for which the current discount will be reduced and possibly eliminated by 2027. French explained, "The discount was first added to the DRIP when the company needed cash for spectrum auctions. With those auctions set to end, we can prioritize paying investors in cash rather than issue new shares, which would dilute existing shareholder value.”
Alongside financial reviews, the market reacted positively to Telus shares, which rose 3% following the earnings announcement, reflecting investor confidence amid overall market fluctuations. On the same day, Telus stock increased by 0.14% to C$20.86, showcasing relative stability as the S&P/TSX Composite Index fell 0.27% to 25,563.11.
Despite these advances, Telus’ shares are still 14.8% below their 52-week high of C$24.47, reached on February 23. An analysis of customer acquisition shows 37,000 new internet customers were added—a solid performance against the forecast of 31,000, indicating effective strategy execution within the residential segment.
Reflections on market positioning also reveal the impact of regulatory changes. Telus continues to expand its fiber internet services across Ontario and Quebec, leveraging the telecommunications regulator's policy allowing major providers to offer services over one another’s networks. This move is contentious, with companies like BCE and Rogers debating the appropriateness of such frameworks.
Looking forward, Telus is positioning itself to navigate headwinds from declining immigration and heightened competition—both factors affecting the telecom industry significantly. The recent financial report allows investors to gauge Telus’ short-term performance, leaving some analysts expressing cautious optimism about the company as it aims to balance competitive pricing with sustainable growth.
With Telus’ demonstrated resilience and clear strategies aimed at future growth, it remains to be seen how effective these measures will be as they evolve alongside industry dynamics. Investors will likely track earnings outlook revisions closely, weighing management’s insights during the earnings calls against market realities to inform potential adjustments of their positions.