RE:Telus operational and financial results for first qtr 2024I thought Q1 earnings were only ok.
The overall subscriber adds were fine. 2 items of note though. In response to the G&M article from about a week ago that asked where growth was going to come from as population growth slows, wireless growth is going to come from connected device/IoT adds vs people needing a cell phone & plan. Network revenue and margin are becoming more important metrics vs Average Revenue Per User. On the wireline side, growth is going to come from product intensity. It sounds like T is going to start rolling out another home product involving home automation on top of phone, tv, internet, and security. T is trying to sell as much as they can through the fat fiber pipe to the home.
What I'm somewhat concerned about is a lot of promises around meeting 2024 guidance is dependent on how the 2nd half of the year plays out, some of which appears dependent on macro economic factors out of their control. While I'm optimistic, it's still risk.
For example, the mothership guided to 2024 TTech Operating Revenue and Adjusted EBITDA growth of 2-4% and 5.5-7.5% respectively. Yet in Q1, the growth was 0.4% and 4.1% respectively. So to offset, Q2-4 are going to have to be extra strong. From a revenue perspective, Health and Ag were pretty muted in Q1 but their VP referenced confirmed sales bookings in Health and channel and distribution investments in Ag that will support revenue targets in the 2nd part of the year.
And from a earnings perspective, they did say that cost efficiencies initiated from last year are still kicking in.
TI, which doesn't fall under TTech, has decent earnings and cashflow but their revenue is disappointing. Doesn't help that their customers and revenue streams seem really finicky. TI's president/CEO talked about TI historically always having a stronger 2nd half of the year. But after they had to revise guidance last year, they have to re-earn that trust/believability. This is part of the reason why I think their share price took a hit.
Regardless, dividend is safe as EBITDA and cashflow are growing. 7-10% dividend growth is safe with the recent increase as proof and I expect they will renew the dividend growth guidance for another 3 year cycle again at next year's AGM.