Rogers posts ‘best’ results in many years with boost from wireless

Rogers Communications Inc. reported what analysts called its “best performance in many years” fuelled by the addition of more wireless customers than expected in the high-demand market.

The Toronto-based communications giant said Thursday it added 122,000 wireless customers on contract in the three months ended Jun. 30, topping analysts’ expectations of 90,000 additions. It also reduced churn, the rate of customers cancelling their service, to 1.01 per cent, the lowest level in nine years.

On the cable side of the business, Rogers beat subscriber expectations by healthy margins. Its internet division added 23,000 customers, the most additions in 13 years and nearly double analysts’ expectations despite heightened competition with Bell in the Toronto area. Revenue for the division increased 10 per cent as more customers adopted higher speed services.

Even Rogers’ television division, which has struggled with losses as it vies to update its product, lost fewer customers than expected, down by 9,000 compared to predictions of a 19,000 customer loss.

The only miss was media, where revenue fell five per cent to $608 million on lower Blue Jays and advertising revenue. Margins and adjusted earnings, however, improved slightly thanks to cost cutting. In June, Rogers laid off about 75 staff when it slashed one-third of its digital content and publishing department.

Overall subscriber numbers drove profit to $538 million from $528 million in the same period last year, with adjusted earnings per share of $1.07 beating analysts’ expectations of $1.05. Chief executive Joe Natale said it made for a “rock solid first half of the year.”

“We’re very pleased with our healthy, robust performance,” Natale said on a conference call with analysts.

Yet adjusted earnings growth was strong enough in the first half of the year that analysts were surprised Rogers didn’t revise its guidance upwards from current expectations of five- to seven-percent growth. Natale, who said 65 per cent of volume happens in the second half, said he expects momentum to continue and that Rogers takes a conservative approach to financial guidance.