Rogers Communications Q1 Profit Down 13%, Results Miss Estimates

(RTTNews) - Canadian communications and media company Rogers Communications Inc. (RCI, RCI-B.TO) on Monday reported a 13 percent decline in profit for the first quarter on lower revenues at its wireless segment, reflecting pricing changes associated with the company's simplified plans and lower-priced roaming plans introduced in mid-2013. Both revenue and adjusted earnings per share for the quarter missed analysts' expectations.

Rogers Communications' first-quarter net income was C$307 million or C$0.57 per share, down from C$353 million or C$0.68 per share in the same period last year.

Adjusted earnings for the quarter were C$340 million or C$0.66 per share, compared to C$414 million or C$0.80 per share in the year-ago period. On average, eleven analysts polled by Thomson Reuters expected the company to earn C$0.71 per share for the quarter. Analysts' Estimates typically exclude special items.

Revenues for the quarter declined to C$3.02 billion from C$3.03 billion in the prior-year quarter. Analysts had a consensus revenue estimate of C$3.06 billion.

The decline in revenues reflect a 2 percent decrease in wireless revenue, offset by a 1 percent increase in revenues at the business solutions segment and an 8 percent increase in revenues at the media segment.

The 2 percent decline in wireless network revenue to C$1.73 billion was mainly related to pricing changes associated with the company's simplified plans and lower-priced roaming plans introduced in mid-2013.

Cable revenue was flat with last year as continued Internet revenue growth was offset by a decline in television and phone revenue associated with competitive TV subscriber losses and a more competitive pricing environment compared to the prior year.

Wireless data revenue grew 10 percent exceeding voice revenue for the first time and now represents about 51 percent of total network revenue.

Wireless activated and upgraded about 579,000 smartphones in the quarter, down from about 673,000 activations in the year-ago quarter. Of the activations in the quarter, 30 percent were new subscribers.

The decrease was mainly due to a 14 percent reduction in hardware upgrades by existing subscribers in the latest quarter, partly due to the move from three to two year contracts and the associated pricing changes. However, the addition of smartphones increased the percentage of subscribers with smartphones to 76 percent of wireless' total postpaid subscriber base from 71 percent last year.

The company expanded its customer base with 2,000 wireless postpaid net subscriber additions, compared to net additions of 32,000 in the year-ago period. Monthly postpaid churn declined to 1.20 percent from 1.22 percent last year, while average monthly revenue per user or ARPU decreased C$3.36 to C$65.20. Blended ARPU decreased 3 percent from last year to C$57.63.

Looking ahead, Rogers Communications said it has made no changes to the 2014 annual consolidated guidance ranges for adjusted operating profit, additions to property, plant and equipment, and free cash flow that it provided on February 12, 2014. At that time, the company forecast fiscal 2014 adjusted operating profit in a range of C$5.00 billion to C$5.15 billion.

On the Toronto stock exchange, RCI-B.TO closed Monday's trading at C$44.28, up C$0.01 or 0.02 percent on a volume of 460,272 shares.