Telus Corp. $40.47 - Toronto symbol T.A

TELUS CORP. $40.47 (Toronto symbol T.A; Shares outstanding: 335.6 million; Market cap: $13.6 billion; SI Rating: Above average) provides local and long distance telephone service in B.C., Alberta and parts of Quebec, and wireless service across Canada. In the three months ended June 30, 2008, Telus’s earnings per share excluding unusual items rose 13.7%, to $0.83 from $0.73 a year earlier. Revenue rose 7.7%, to $2.4 billion from $2.2 billion. Strong gains at its wireless and high-speed Internet operations offset lower local and long-distance revenues. Telus’s shares yield 4.5%. Recent auctions of new radio frequencies (or wireless spectrum) will let new cell phone firms enter the market. These include Quebecor, European and Egyptian-backed Globalive and Data & Audio-Visual Enterprises Wireless, a firm controlled by Canadian businessman John Bitove. Just 60% of Canadians use a cellphone, so there’s still room for growth in the industry. As well, Telus’s strong reputation for customer service and its focus on more affluent users and long-term customers should help it expand its wireless profits. Telus added to its services to businesses earlier this year with the acquisition of Emergis Inc. for $763 million. Emergis makes software that helps businesses and hospitals automate, secure, store and process electronic transactions and patient data. Emergis’s expertise should help Telus sell more communication services to businesses, including Emergis’s high-quality clientele. Telus is still a buy.