Canadian communications and media company Rogers Communications Inc. (RCI: Quote,RCI_A.TO: Quote,RCI_B.TO: Quote) on Tuesday reported a 2 percent decline in profit for the second quarter on revenues that were almost flat with last year. However, adjusted earnings per share increased on higher margins in the company's wireless as well as cable business and beat analysts' estimates.
Nadir Mohamed, President and Chief Executive Officer of Rogers Communications Inc. said, "Our revenue and adjusted operating profit growth in the second quarter was highlighted by strong postpaid wireless smartphone sales and customer retention metrics, as well as exceptionally strong margins in both our wireless and cable businesses."
Wireless network revenue grew 1 percent. Cable operations revenue grew 1 percent, and Media revenue increased 1 percent, but was offset by declines in RBS and Wireless equipment sales.
Consolidated margins of 41 percent rose 90 basis points from the year-ago period and increased 390 basis points on a sequential basis from the preceding first quarter.
Wireless data revenue grew by 13 percent and net postpaid subscriber additions totaled 87,000, helping drive wireless data revenue to now comprise 39 percent of Wireless network revenue compared to 35 percent in the same quarter last year. However, net postpaid subscriber additions declined 21 percent from the prior-year period.
During the latest quarter, Wireless activated 629,000 smartphones, of which about 36 percent were for subscribers new to Wireless. This compares to about 591,000 smartphones activations in the year-ago period.
Monthly churn declined 0.06 percent to 1.15 percent, while average monthly revenue per user or ARPU declined C$1.61 from last year to C$68.46 due to a decline in wireless voice revenues.
At the cable television business, revenue edged up only 1 percent, reflecting the impact of promotional and retention pricing activity associated with heightened competitive activity that offset pricing changes made in March 2012. Adjusted operating profit margin for the segment edged up to 47.8 percent from 47.7 percent last year.
Rogers Communications' second-quarter net income was C$400 million or C$0.75 per share, down from C$410 million or C$0.74 per share in the year-ago period.
Excluding items, adjusted net income from continuing operations grew to C$478 million or C$0.91 per share from C$469 million or C$0.85 per share in the year-ago quarter.
On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of C$0.86 per share for the quarter. Analysts' estimates typically exclude special items.
Total operating revenue for the quarter edged up to C$3.11 billion from C$3.10 billion in the same period last year. Analysts had a consensus revenue estimate of C$3.14 billion.
In Tuesday's regular session, on the NYSE, RCI is trading at $38.54, up $1.92 or 5.24 percent on a volume of 264,278 shares.
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by RTT Staff Writer
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