Cable, ad sales help Rogers beat quarterly revenue expectations
Rogers Communications Inc on Wednesday reported second-quarter revenue that beat analysts' estimates, helped by a pickup in advertisement sales and as its cable business benefited from a pandemic-driven shift to remote work and entertainment.
The requirement of high-speed broadband networks to carry on remote work helped the telecom operator negate the slow recovery from its wireless business.
The return of live sport broadcasting also played a positive role in boosting the Toronto-based telecom operator's revenue.
The company's total revenue rose 14 per cent to $3.58 billion in the quarter ended June 30, compared with analysts' average estimates of $3.56 billion, according to IBES data from Refinitiv.
Earlier in March, Rogers said it would buy Shaw Communications Inc for about $20 billion, aiming to double down on its efforts to roll out 5G throughout the country.
Revenue for its cable unit, which includes internet, phone and cloud-based services, rose five per cent during the quarter
Quarterly net income rose to $302 million, or 60 cents per share, from $279 million, or 54 cents, a year earlier.
The result comes as governments across Canada have eased COVID-19 restrictions, with vaccinations accelerating. Rogers, as the country's largest wireless company by subscribers, is more exposed to the loss of roaming revenue caused by travel restrictions. In other insights:
■ The Toronto-based company added 99,000 postpaid wireless subscribers. Average revenue per user rose seven cents to $49.16 as a result of higher roaming revenue;
■ Rogers's profitability met expectations. Adjusted diluted earnings were 76 cents per share, which was in line with the average analyst estimate.
“Our solid performance in the second quarter is a result of strong execution across each of our business units as the economy continues to recover from pandemic lockdowns,” CEO Joe Natale said in a release. “As Canada emerges from the pandemic, our financial position and increased regulatory certainty for facilities-based providers enables us to continue enhancing connectivity,” he added.
Natale said during a conference call with analysts that the company is still on track to complete its acquisition of Shaw Communications by the first half of 2022.
The report comes as the federal government nears an announcement on the results of the 3,500 MHZ spectrum auction on Friday. It was previously reported that Canada raised about $8 billion, a “shockingly high” figure according to one analyst.
Rogers shares were up 13 per cent this year as of Tuesday's close. “The stock has outperformed its peers since the end of the 1Q reporting season, which we believe was due to the reopening trade,” Desjardins analyst Jerome Dubreuil wrote in a July 12 note to investors.