The Vancouver-based telecom company said its fourth-quarter profit tumbled 42 per cent from a year ago as costs related to its lengthy labour disruption offset higher revenues.
“We were determined to bring the collective bargaining process to a positive conclusion for our shareholders, our customers and our team members,” Telus chief executive Darren Entwistle told a conference call with analysts.
“The process to achieve this outcome took time, perseverance and a great deal of strategic thinking. We remain convinced the outcome was worth this investment of Telus resources.”
Unionized workers at Telus were off the job for four months last year in a bitter labour dispute with the Telecommunications Workers Union over the outsourcing of work.
The positions eliminated included janitorial services vehicle maintenance and coin sorting. The company is also closing a call centre in Victoria.
Entwistle said the new contract also allows for an increase in the proportion of part-time and temporary employees at the company. Additionally, 6,000 Telus employees each gave up nine holiday days.
“This improves Telus’s ability to schedule and optimize fluctuating workloads in a highly competitive environment,” he said.
Telus earned $78.5 million or 22 cents per share for the three months ended Dec. 31, 2005, compared with $135.6 million or 38 cents a share a year earlier.
Telus attributed the fall to costs associated with the labour disruption, higher restructuring expenses and a non-recurring financing charge for the early retirement of $1.6 billion of debt.
The company said the labour dispute cost Telus 10 cents per share, while the restructuring costs totalled seven cents per share. The charge for the bond redemption cost six cents per share.
Quarterly revenue for the quarter increased 6.2 per cent to $2.1 billion on strength in from its mobile-phone division.
In its outlook, Telus affirmed its guidance of earnings per share in 2006 of $2.40 to 2.60 per share, on revenue in the range of $8.6 billion to $8.7 billion. The company said it expects capital spending to be $1.5 billion to $1.55 billion and free cashflow of $1.55 billion to $1.65 billion.
Telus chief financial officer Robert McFarlane said the wireless business will probably generate more profit than the wireline segment in 2006.
“It’s growing and its a good profitable business and the wireline side is basically growing in some parts, but shrinking in others,” McFarlane said.
In Friday afternoon trading on the Toronto Stock Exchange, Telus shares were down 66 cents at $44.34.
