Manitoba Tel’s Dividend Safe For Now

Article Excerpt

MANITOBA TELECOM SERVICES INC. $46 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; SI Rating: Average) provides local, long distance and wireless communication services to 1.8 million customers in Manitoba. In 2004, the company acquired Allstream Inc., a national provider of telecom services to businesses, as part of a plan to cut its reliance on Manitoba. Allstream now accounts for around 55% of Manitoba Tel’s revenue, and 30% of its profit. However, the business telecom market is highly competitive, and falling rates have hurt Allstream’s revenue and profits. In the first quarter of 2006, a 5% drop in Allstream’s revenue offset gains from Manitoba Tel’s other operations, and total revenue fell 1.3%, to $488.8 million from $495.1 million a year earlier. The company’s plan to cut expenses by $100 million a year is starting to pay off. Manitoba Tel’s earnings in the quarter rose 3.2%, to $0.65 a share (total $44.0 million) from $0.63 a share ($42.5 million). Residential lines fell 6.5% in the quarter,…

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