Cracking the 7-million subscriber mark was the highlight of a strong first quarter report for Vancouver’s Telus, which saw an increase of 6.5 percent in revenue and a wireless data revenue surge of nearly 50 percent.
“These quarterly results demonstrate the success of TELUS’ strategy for driving data growth in our wireless and wireline businesses and providing a leading range of services and products for consumers and businesses alike,” said Darren Entwistle, Telus president and CEO. “Underpinned by our strategic network investments and TELUS’ continued momentum in the market, we are generating accelerating sales of smartphones and continued strong Optik TV and High Speed Internet sales. This momentum drove 44 per cent revenue growth in wireless data and 11 per cent growth in wireline data.”
One note that helped see the company’s stock rise was a generous dividend boost.
“Based on our positive financial outlook and aligned with our dividend growth model, Telus is pleased to increase the quarterly dividend by 2.5 cents or almost five per cent to 55 cents, which is the third increase in the past 12 months,” noted Darren. “This reflects our continued confidence in our prospects for earnings and cash flow growth in 2011 and beyond.”
In fact, the stock looks pretty good to buy at a reasonable 14.8 price-to-earnings ratio and some solid medium-term promises:
“I am also pleased to report that after conferring with the Board, we are providing shareholders with additional clarity on our intentions regarding Telus’ dividend growth model,” said Darren. “Specifically, Telus is targeting two dividend increases per year to 2013 in the range of circa 10 per cent annually. Notwithstanding this, dividend decisions will continue to be subject to the Board’s assessment and determination of the Company’s financial condition and outlook on a quarterly basis.”
The confidence in the organization isn’t just beaming from Darren; vice-president and CFO Robert McFarlane was also touting the strong numbers and bright prospects.
“TELUS’ strong operational performance, declining interest expense and robust financial position allows us to fund ongoing strategic capital investments, the dividend increase and in the first quarter a voluntary $200 million pension contribution,” said Robert. “We continue to consider the interests of both equity and debt holders by adhering to our long-term financial policies including our dividend payout ratio guideline and debt leverage policy.”