Telus Corp T.T

Alternate Symbol(s): TU

Communication Services Telecom Services

TELUS Corporation is a Canada-based communications technology company. The Company provides a range of technology solutions, including mobile and fixed voice and data telecommunications services and products, healthcare software and technology solutions, and digitally led customer experiences. Data services include Internet protocol; television; hosting, managed information technology and cloud-based services; and home and business security. Its TELUS technology solutions segment includes network revenues and equipment sales arising from mobile technologies, data revenues, healthcare software and technology solutions, agriculture and consumer goods services, voice, and other telecommunications services revenues. Its TELUS International segment comprises digital customer experience and digital-enablement transformation solutions, including artificial intelligence (AI) and content management solutions. It is also a cybersecurity provider specializing in advanced penetration testing.

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Telus Corp

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Post by retiredcfon Feb 10, 2022 8:41am

163 Views

Post# 34415788

RBC

I suspect we will soon see an upgrade. GLTA

February 10, 2022

Outperform

TSX: T; CAD 31.04; NYSE: TU

Price Target CAD 32.00

TELUS Corporation

Solid Q4/21 Results In Line to Slightly Better; 2022 Guidance Notably Stronger than Forecast

Our view: Solid Q4/21 results were in line to slightly better than our high expectations across the board with 2022 guidance notably stronger than forecast. On another positive note, we believe 2022 capex guidance (below our estimate) and re-affirmed 2023 capex guidance of $2.5B confirm a long- awaited capex inflection point after years of elevated investments. We view the results and outlook as positive for the shares despite the recent run-up.

Solid Q4/21 results in line to slightly better than our high expectations. Revenues and adjusted EBITDA (excluding a gain on the sale of the financial solutions business) were $4,462MM (+9.9% YoY) and $1,517MM (+7.7%), respectively, versus our estimates of $4,352MM and $1,493MM (consensus is $4,431MM and $1,524MM). The positive revenue variance was mainly due to higher growth from fixed data services (+11.7% versus +7.1%). Adjusted EPS was $0.23 versus our estimate of $0.25 (consensus is $0.25). See Exhibit 1 for a summary of Q4/21 results versus our expectations.
Management guidance notably stronger than forecast. As expected, management provided 2022 guidance: (i) consolidated operating revenue growth of +8% to +10% versus our revenue growth forecast of +5.0% YoY; (ii) consolidated adjusted EBITDA growth of +8% to +10%, versus our forecast of +6.3%; (iii) FCF of $1.0B to $1.2B versus our forecast of $1.0B; and (iv) capex of ~$3.4B versus our forecast of $3.6B.
Strong financial and operational performance from TELUS Technology Solutions (TTech) with +12.0% growth in fixed data services. TTech revenues and adjusted EBITDA (excluding unusuals) were $3,824MM (+6.5% YoY) and $1,348MM (+6.9%), respectively, versus our estimates of $3,714MM and $1,334MM. The positive revenue variance was mainly due to +12% growth in fixed data services versus our +7% estimate. Adjusted EBITDA margins were 35.3% (+14bps YoY) versus our 35.9% estimate. Key wireless metrics were solid: (i) mobile network revenue was $1,591MM (+5.0% YoY) versus our estimate of $1,577MM (+4.1%); (ii) mobile phone net additions were +112k versus our estimate of +93k and consensus of +100k; and (iii) mobile phone ARPU and ABPU growth were +1.0% and +0.6%, versus our estimates of +0.5% and +0.5%, respectively (consensus is +1.1% and +0.7%). Key wireline metrics were also solid: (i) Internet net additions of +40k versus our estimate of +40k and consensus of +39k; (ii) TV net additions of +18k versus our estimate of +15k and consensus of +13k; and (iii) security net additions of +31k versus our estimate of +23k. TELUS Health service revenue growth was +18.6% YoY versus our +12.6% estimate.
TELUS International in line with forecast. Revenues and adjusted EBITDA were $638MM (+36.0% YoY) and $169MM (+14.2%), respectively, versus our estimates of $637MM and $159MM.
What to look for on the 12:00pm ET conference call (#1-855-353-9183 CC:67674#). (i) key drivers underlying strong guidance; and (ii) an update on the competitive and operating environment in Q1/22.