Ericsson's Aduna Joint Venture Partners With EnStream to Expand Network API Ecosystem in Canada

Canadian telcos are back to fighting tooth and nail for subscribers, slashing prices for their mobile services. TD Cowen's Vince Valentini says "over the past week we have noticed more aggressive online wireless pricing from the big three flanker brands." The analyst says that the most notable changes include the addition of a C$39/20GB plan at Fido and Virgin Plus, and more aggressive pricing at Koodo, which now offers a C$39/60GB plan. In-store is also more aggressive, with many of the carriers offering C$35/60GB. "After approximately one and a half months of more disciplined behavior, we have seen a return of more aggressive rate plans," Valentini says. "We fear an imminent response from Freedom," Valentini adds. (adriano.marchese@wsj.com)

European equities traded in the US as American depositary receipts were marginally higher late Thursday morning, up 0.06% to 1,400.21 on the S&P Europe Select ADR Index.

From continental Europe, the gainers were led by biopharmaceutical company Grifols and Spanish lender Banco Santander , which rose 1.5% and 1.3% respectively. They were followed by telecommunications company Ericsson and biopharmaceutical company Argenx , which were up 1% and 0.9% respectively.

The decliners from continental Europe were led by 3D printer company Materialise and semiconductor company Sequans Communications , which fell 32% and 3.9% respectively. They were followed by accommodations booking company Trivago and internet browser company Opera , which lost 3.8% each.

From the UK and Ireland, the gainers were led by financial services company Lloyds Banking Group and mining company BHP Group , which increased 6.4% and 1.9% respectively. They were followed by pharmaceutical companies GSK and AstraZeneca , which dropped 1.6% and 1.1% respectively.

Telus' fourth-quarter results were in line with RBC's forecast and 2025 guidance was slightly stronger than expected and certainly the best among the Big 3, notes RBC analyst Drew McReynolds.

While acknowledging some uncertainty over telecom pricing and market expansion in 2025, management expects increased product intensity and multi-product penetration across its subscriber base, small and medium business (SMB) revenue growth, and double-digit growth in high-margin IoT revenues and other new B2B revenues, may potentially shield Telus from broader industry headwinds, McReynolds writes.

Reiterate Outperform. Target increased by $1, to $25.

Ratings actions from Baystreet: http://www.baystreet.ca

(16:49 GMT) TELUS Corp. Price Target Raised to C$25.00/Share From C$24.00 by TD Securities

Ratings actions from Baystreet: http://www.baystreet.ca

TELUS has an average rating of overweight and mean price target of CA$22.92, according to analysts polled by FactSet.

TELUS Corporation TU reported fourth-quarter 2024 adjusted earnings per share (EPS) of C$0.25 (18 cents) compared with C$0.24 in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 20%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Quarterly total operating revenues increased 3.5% year over year to C$5,381 million ($3,846 million) owing to higher service revenues and higher other income from real estate and copper monetization in the TELUS technology solutions (TTech) segment, offset by lower service revenues in the TELUS digital experience segment (TELUS Digital). The top line beat the Zacks Consensus Estimate of $3,643.7 million.

TELUS Corporation Price, Consensus and EPS Surprise

TELUS Corporation price-consensus-eps-surprise-chart | TELUS Corporation Quote

The company’s operating revenues (from contracts with customers) were C$5,331 million, up 3.4% year over year. TELUS reported 328,000 net customer additions in the fourth quarter, down 76,000. This includes strong mobile phone net additions of 70,000, 194,000 connected device additions and 64,000 total fixed net additions.

Quarterly Segmental Results

In the fourth quarter, TTech revenues and other income rose 4.9% year over year to C$4,677 million. TTech operating revenues (arising from contracts with customers) increased 4.1% year over year to $4,622 million.

This was driven by mobile equipment, fixed data revenue growth and strong growth in health, agriculture and consumer goods services. However, the growth is partly offset by lower prices in mobile, along with a decline in TV and fixed legacy voice services sales.

Mobile network revenues decreased 0.1% year over year to C$1,758 million due to a decline in mobile phone ARPU, partially offset by higher mobile phone subscriber count and strength in IoT connections.

Fixed voice services revenues declined 8% year over year to C$173 million as a result of the ongoing fall in legacy voice revenues due to technological substitution and price plan changes. The decrease was partly offset by the success of bundled product offerings and the company’s retention efforts.

Health services revenues increased 10% year over year to C$475 million, driven by business acquisitions in employee and family assistance programs along with organic growth, a boost in virtual pharmacy sales and rising demand for health benefits management and retirement solutions.

The segment’s adjusted EBITDA of C$1,711 million increased 7% year over year, owing to broad-based cost-reduction efforts, benefits from real estate and copper monetization and a rise in health services revenues. Adjusted EBITDA margin improved 110 basis points year over year to 38.2%.

TELUS Digital's operating revenues (arising from contracts with customers) fell 0.7% to C$709 million due to lower revenues from certain technology and eCommerce clients. This was partially offset by a favorable foreign currency impact.

TELUS Digital's operating revenues and other income inched down 0.2% to C$967 million. The segment’s adjusted EBITDA of C$143 million decreased 42.6% from the year-ago quarter.

Other Details

Adjusted EBITDA decreased a modest 0.6% year over year to C$1,838 million.

Cash Flow & Liquidity

In the fourth quarter, TELUS generated C$1,077 million of cash from operating activities compared with C$1,314 million in the year-ago quarter. The free cash flow decreased 10.3% to C$534 million.

Capital expenditures (excluding spectrum licenses) increased 3.4% year over year to C$551 million.

2025 Guidance

TELUS issued its financial targets for 2025, backed by long-term financial objectives, policies and guidelines. The company anticipates 2-4% growth in TTech operating revenues, which excludes other income. In 2024, TTech's operating revenues totaled $17,407 million.

TTech adjusted EBITDA is expected to grow 3-5%, while free cash flow is projected to reach nearly $2.15 billion. Capital expenditures are estimated at $2.5 billion, excluding $100 million allocated for real estate development initiatives.

TU’s Zacks Rank

TELUS currently carries a Zacks Rank #4 (Sell). Shares of the company have lost 17.2% in the past year compared with the Zacks Diversified Communication Services industry’s decline of 16.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies in Broader Utilities Space

BCE Inc. BCE reported fourth-quarter 2024 adjusted EPS of C$0.79 (56 cents) compared with C$0.76 in the prior-year quarter. The Zacks Consensus Estimate was pegged at 50 cents.

In the past year, shares of BCE have declined 36.6%.

DTE Energy Company DTE reported fourth-quarter 2024 operating EPS of $1.51, which beat the Zacks Consensus Estimate of $1.46 by 3.4%. However, the bottom line declined 23.4% from the year-ago reported figure of $1.97.

In the past year, shares of DTE have gained 18.6%.

Exelon Corporation’s EXC fourth-quarter 2024 EPS of 64 cents surpassed the Zacks Consensus Estimate of 59 cents by 8.5%. The figure also increased from the year-ago level of 60 cents per share. Higher distribution and transmission rate increases at Pepco Holdings LLC boosted earnings.

In the past year, EXC shares have gained 23.2%.

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