Analysts focus on Quebecor results now that Péladeau back in charge

Next-generation TV platform key for company

Investors are paying close attention to financial results now that Pierre Karl Péladeau is back at the helm of his family’s business after his foray into provincial politics.

All eyes are on Péladeau as the Montreal-based communications and media company prepares to release results on Wednesday, Barclays analyst Phillip Huang wrote in a note to clients Monday.

“The stock’s decline on the news of Pierre Karl Péladeau’s return as CEO last month likely reflected concerns that there will be disruptions to the four years of disciplined execution under professional management,” Huang wrote.

But Huang believes those concerns were “overdone,” noting there is “strong continuity” in the management team. Pierre Dion, who ran the company in Péladeau’s absence, was appointed to the boards of Quebecor and Quebecor Media. Péladeau previously held the top spot for 14 years before stepping aside to enter politics.

“We assume that Mr. Péladeau had always been involved with all major strategic/capital deployment decisions,” Huang added. Péladeau faced scrutiny throughout his political career with the Parti Quebecois over his involvement in the business. Opponents criticized him for refusing to sell his shares.

Quebecor’s stock dipped for a week after Péladeau’s return was announced, although it has since climbed.

Analysts expect strong performance from Videotron, Quebecor’s wireless carrier, and will seek guidance on whether Quebecor intends to sell its non-core spectrum.

Analysts are also watching to see whether Quebecor, a traditional cable company, makes a decision on a nextgeneration television product to compete with Internet

“X1 is likely an attractive option for Videotron, but it would present some challenges (language) given the consumer demographics in Quebec,” Huang wrote. He does not expect a decision on the platform until the second quarter.

“Quebecor is the only major cableco that has yet to announce its next generation television platform,” RBC analyst Drew McReynolds noted in January. Yet Quebecor has managed to “hold the line” on its cable and Internet subscriber numbers despite accelerated fibre-to-the-home deployment in the province, he wrote.