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VANCOUVER - Despite reporting higher net profits and revenues through "solid operational execution" in the second quarter, Telus Corp.'s (TSX:T) chief executive says he's less than happy with the big telecom company's performance.

Expanding its key cellphone and data businesses across the country, Telus reported Friday net profits of $267 million or 83 cents a share for the three months ended June 30. That was up 5.5 per cent from $253.1 million or 76 cents a year earlier.

But the quarter "also presented certain challenges for Telus that were less than satisfactory," CEO Darren Entwistle told a conference call with analysts.

Those challenges included a 92-cent decline in wireless average revenue per user "that can be attributed to the competitive voice pricing we are facing in the Canadian market, which is offsetting our strong 54 per cent growth in wireless data."

Nevertheless, Canada's second-biggest telecom operator reported revenue from wireless services up nine per cent from a year ago and a gain in revenue from wireline data services of 20 per cent.

Overall, the Vancouver-based company said its revenue was $2.4 billion, up eight per cent from the second quarter of 2007. Telus also raised its revenue guidance for the year.

The company earned 83 cents per share, up nine per cent, and said it will maintain its dividend for the quarter at 45 cents per share.

Though the company missed analyst estimates of 86 cents a share, investors welcomed the solid growth in wireless and data sales and the prospect of higher revenues ahead.

Telus now expects consolidated revenues between $9.675 billion and $9.825 billion, raised from an earlier projection of $9.6 billion to $9.8 billion. It also dropped the upper end of its guidance for earnings per share to $3.50 to $3.70 from $3.50 to $3.80.

Telus shares rose $2.25 to $41.20, a gain of almost six per cent. The shares have traded between $37.30 and $58.95 over the past year.

"Overall financials were a bit light," UBS analyst Jeffrey Fan observed in a note to clients, adding that the guidance change was "not significant."

The brokerage kept its 12-month "neutral" rating on Telus stock, with a 12-month price target of C$43.

Overall, Entwistle said the company is succeeding with a focused strategy. With last year's acquisition of the former Emergis Inc. of Montreal, Telus has expanded in Ontario and Quebec and into providing technology systems for customers in health care and financial services.

But he was less than pleased with restructuring initiatives during the quarter.

"Despite the fact that since 2001 Telus's ongoing investment in restructuring and workforce reduction totals $1 billion, I am less than satisfied with the revision of our restructuring expense target from $50 million to $30 million," Entwistle said.

"Clearly we need to realize improved traction on our efficiency initiatives," he said.

"This is key if we are to absorb the endemic challenges of the telecom industry including price commoditization, new competition and dilution from new technologies."

Robert McFarlane, Telus's chief financial officer, said the company expects solid results ahead.

"As a result of good operational execution year to date, we have made upward revisions to full year 2008 revenue guidance, as well as narrowing the ranges for EBITDA and EPS guidance, while maintaining existing guidance for non-spectrum capital expenditures."

"The 50 per cent expansion of our commercial paper program to $1.2 billion announced today enhances our flexibility and access to financing at attractive rates," McFarlane said.