TORONTO — Telus Corp. on Friday announced a $1.2-billion acquisition that fits plans for converting its international division into a public company.
Lionbridge AI of Waltham, Mass., which specializes in improving how well artificial intelligence systems recognize images, video, audio and text, will become part of Telus International and TI will do an initial public offering of shares in a partial spinoff from the parent company.
Currently owned by a private company, Lionbridge AI employs more than 750 employees in the United States, Western Europe, India, Japan and South Korea.
Lionbridge also recruits and trains tens of thousands of contract workers around the world who label various types of data to make it usable for AI systems.
Telus currently owns about two-thirds of TI's equity and expects to own more than 50 per cent after the planned IPO, which is expected to be in the first quarter of 2021.
Telus chief executive Darren Entwistle told analysts Friday that Lionbridge AI will accelerate growth at Telus International, which uses advanced digital technologies to improve the business performance of Telus Corp. itself as well as external client companies.
"This acquisition advances Telus' commitment to harness the power of technology and data to provide outstanding customer experiences on a global basis," Entwistle said.
He also credited the international division with helping Telus Corp. to successfully adapt its core customer service and business operations during the COVID pandemic.
Analysts said Telus Corp. outperformed expectations on a number of fronts during the third quarter, ended Sept. 30, although its profit was down from the comparable period of 2019.
Net income attributable to Telus common shares fell to $307 million or 24 cents per share, compared with a profit of $433 million or 36 cents per share a year ago.
On an adjusted basis, Telus earned $356 million or 28 cents per share for the quarter, down from an adjusted profit of $458 million or 39 cents per share a year ago.
Operating revenue totalled $3.98 billion, up from $3.70 billion in the same quarter last year.
The revenue was above analyst estimates of $3.82 billion but profit was below the estimate of 31 cents per share of adjusted earnings, according to financial data firm Refinitiv.
Some of the earnings miss was due to the loss of high-margin revenue for wireless roaming fees, due to a lack of travel, and other COVID-related factors during the quarter.
However, Telus did better than expected in adding to its customer base, including 111,000 wireless phone subscribers (compared with estimated 84,000), 50,000 internet customers (compared with estimated 29,000) and 19,000 TV subscribers (13,000 estimated).
The Telus quarterly report concluded the telecom and cable industry's fall earning season.
On the whole, there was a consistent message from the country's largest wireless and internet companies, which saw their telecom operations show a strong rebound from the worst impact they've felt from the COVID-19 pandemic during the second quarter.
Telus shares closed Friday at $23.32, up 29 cents at the Toronto Stock Exchange
This report by The Canadian Press was first published Nov. 6, 2020.
Companies in this story: (TSX:T)
David Paddon, The Canadian Press
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