Vancouver-headquartered Telus Corp. (TSX:T) reported a 45% decline in fourth quarter net profit although operating revenues declined only slightly to $2.44 billion.
Net income fell to $156 million due to the after-tax impact of approximately $69 million relating to the costs of an early partial redemption of notes due June 2011 from the $1 billion refinancing that closed in December.
Other factors affecting earnings included a 13% increase in operating expenses in its wireless division to $797 million from $703 million and a 5% increase in operating expenses in its wireline division to $900 million from $856 million.
For the year, net income fell 11.4% to $1 billion from $1.13 billion from operating revenue of $9.6 billion, down from $9.65 billion.
Annual earnings from wireline operations fell 12% to $1.55 billion from $1.77 billion, while earnings at its wireless division was relatively stable falling 3.6% to $1.93 billion from $2 billion.
Telus said the economic downturn reduced its wireless revenue growth and so it decided to accelerate the company's efficiency efforts to help mitigate the effects of the recession. It also expanded its infrastructure completing an early launch of its national 3G+ wireless network, expansion of of Telus TV availability and extending the reach and speed of its broadband services.
Its wireline segment was impacted by slower data revenue growth and faster erosion of its voice revenue. Strong price competition in both data and voice services, as well as more cautious spending by consumers and businesses were also contributing factors.
Despite the economic challenges, Telus reported an increase of 284,000 subscribers, including a 6.4% increase in wireless subscribers and 118% growth in Telus TV subscribers. Those increases partially offset a 0.4% decline in Internet subscribers and 4.7% decline in total network access lines.
For 2010, Telus is targeting a 2% to 5% increase in consolidated revenue to between $9.8 billion to $10.1 billion. Its earning target for the year is between $3.5 billion to $3.7 billion. Much of the revenue growth is expected from its wireless division, with a forecasted revenue increase of between 5% to 8%.
Telus' share price range during the past week: between $32.53 and $33.80; 52-week high: $36.50; 52-week low: $29.12.