Freedom Mobile powers Shaw’s Q1 growth
Shaw Communications Inc. beat analyst estimates for profit and revenue as growth at its Freedom Mobile wireless business and its business services unit offset flat results at its core residential services
Since acquiring Wind Mobile, Calgary-based Shaw has spent heavily to improve the capabilities of its wireless network, which operates in the more heavily populated portions of Ontario, Alberta and British Columbia.
“We continue to build momentum in our wireless business by leveraging our significant network investments and offering affordable and innovative data plans,” chief executive Brad Shaw said in a statement Monday.
The Calgary-based company earned $187 million or 36 cents per share in the quarter ended Nov. 30, up from $111 million or 22 cents per share a year earlier.
Its overall revenue was up 8.8 per cent year-over-year, rising to $1.36 billion from $1.25 billion a year ago.
Analysts on average had expected a profit of 34 cents per share and $1.32 billion in total revenue, according to Thomson Reuters Eikon.
Shaw’s wireless division increased revenue by 60 per cent to $273 million with 66,000 net subscriber additions, while revenue business services division grew five per cent to $147 million.
Revenue from Shaw’s core residential services was flat at $936 million as it lost cable and satellite video subscribers and home phone customers, but gained internet subscribers.
Analysts had expected soft results from Shaw’s residential business, which has been updating its systems amid competition from Vancouver-based Telus Corp., which is also one of Canada’s three main national wireless carriers that also competes with Freedom.
Analyst Aravinda Galappatthige of Canaccord Genuity said he’s looking for signs that Shaw’s cable subscriber base will stabilize.
A year ago, the company announced a major employee buyout program aimed primarily at its residential consumer business, part of Shaw’s plan to adapt to a new generation of network technology using the Comcast X1 platform.
“While we are still early days in our journey towards a modern Shaw, I am encouraged by the progress we have made,” Brad Shaw said in a statement Monday.