Telus (TSE:T), the Vancouver telecommunications giant, said its former longtime president and chief executive, Darren Entwistle, would return to the helm, effective immediately, to succeed Joe Natale, who has stepped down.
Telus said the move follows “an extensive review” by its board, which determined the company would be best served by having its chief executive based in western Canada, where the company is based.
The move also comes less than two months after Telus was beaten out by market leader Rogers Communications (TSE:RCI.B) in a drawn-out quest to acquire struggling telecom startup Mobilicity.
Entwistle, 52, who was CEO from 2000 to 2014, will resume his role, and Dick Auchinleck, 63, will become independent chairman, Telus said. They both have agreed to stay in these capacities on a long-term basis.
After handing over the top job to Natale in March 2014, Entwistle took the position of executive chairman, though often spoke first on the company's quarterly conference calls and made investment announcements.
Shares retreated 1.3 percent to C$43.99 at 2:04 p.m. in Toronto, trimming gains over the past year to 16 percent.
Separately, Canaccord Genuity downgraded the stock and booted from its ‘focus list’ after Friday’s earnings update.
Its recommendation goes to ‘hold’ from ‘buy’ with the share price homing in on the broker’s price target of C$46 a share.
At issue is the communications giant’s decision to increase the capital investment, which may impact its ability to increase the dividend payment at its current rate of around 10%.
The results themselves were robust, given the current market conditions, according analyst Aravinda Galappatthige, who pointed to low churn from the wireless arm as the ‘highlight’ of second quarter numbers.
The big miss was free cash flow, which came in around C$100mln below consensus at C$300mln.
Underlying earnings (EBITDA), excluding restructuring and other one-off costs, increased by 5.1% cent to C$1.1bn in the three months to June 30 on revenues of C$3.1bn.
“Given the backdrop of Business segment headwinds due to a weak economy and short-term wireless pressure due to the double cohort, we consider the results an overall solid achievement,” said Canaccord’s Galappatthige.