Rogers Q1 profit, adjusted earnings soar on revenue growth

TORONTO — Rogers Communications Inc. saw its first-quarter profit soar from the same time last year as its wireless division experienced a growth spurt that exceeded analyst estimates.

The wireless, cable, internet and media company’s net profit was $425 million, up 37 per cent from $310 million in the comparable period last year.

Adjusted earnings grew even more, rising by 45 per cent to $477 million, while total revenue was $3.63 billion, up eight per cent from $3.37 billion last year.

The net profit reported by Rogers, under a new accounting standard that it adopted for this year, amounted to 83 cents per share, up from 60 cents per share.

Growth in consolidated EBITDA, earnings before taxes and other items, was 11.1 per cent — above the consensus estimate of 5.9 per cent.

More than half of total revenue for Rogers was from the wireless division, which was up nine per cent to $2.19 billion.

Rogers chief executive Joe Natale told analysts in a conference call after the results were released Thursday afternoon that the overall wireless marketplace, including the company’s rivals, appears to have had healthy growth during the quarter.

In addition, he said, Rogers made progress in reducing the loss of customers — or churn — by proactively looking for ways to retain customers and investing in improvements at its call centres.

“If you look at what we’ve been focused on, we’ve been focusing on doing a better job of managing our base of customers and really kind of looking through our base and looking at retention — proactive retention opportunities,” Natale said.

He said the investments in systems “will continue to pay dividends for us.”

Among the wireless performance metrics that contributed to the quarter was 95,000 net postpaid additions — compared with 60,000 a year earlier — and reduced postpaid churn of 1.08 per cent, down from 1.1 per cent a year earlier.

The consensus estimate had been for about 55,000 net postpaid additions and churn of 1.13 per cent.

The first quarter’s wireless results were a stark contrast to the fourth quarter, when 72,000 net subscriber additions were below estimates.

Natale said estimated on a Jan. 25 analyst call that technical problems in December, during a seasonally important period, had cost Rogers about 35,000 net additions to its subscriber base in the fourth quarter.

Rogers has one of Canada’s three national wireless networks, operating under the Rogers, Fido and Chatr brands.

It also owns the Toronto Blue Jays baseball team through its media division and one of Canada’s largest cable TV networks, based mostly in Ontario and Atlantic Canada.

Natale said revenue growth at the Rogers media division — which was up 12 per cent from a year ago to $532 million — was primarily due to sports.

Companies in this story: (TSX:RCI.B)