By Jaspreet Singh
April 24 (Reuters) – Rogers Communications posted a drop in first-quarter profit on Wednesday, as it grappled with weakness at its media business and higher expenses, sending shares of the Canadian telecom company down more than 3% in afternoon trading.
Media revenue at the owner of baseball team Toronto Blue Jays fell 5% to C$479 million in the quarter ended March 31 due to lower subscriber revenue and higher media content costs.
The business also saw a 7% rise in operating costs to C$582 million because of programming and production costs and higher payroll related expenses for its baseball team.
“Finance costs, the acquisition of Shaw Telecom, and lower media subscription revenues are all weighing on net earnings,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.
The company saw a 23% jump in operating expenses in the quarter, as it booked C$142 million in restructuring costs mainly for severance, including about C$30 million for its acquisition of Shaw Communications.
Its net income fell 50% to C$256 million. However, adjusted profit was in line with expectations.
The net income drop took the shine off strong growth in Rogers’ wireless business.
The company added 98,000 net monthly bill-paying wireless phone subscribers in the quarter, topping the Visible Alpha consensus estimate of 77,530 net additions, helped by demand from rising population driven by temporary foreign workers and immigrants.
In the reported quarter, Rogers’ free cash flow, a metric closely watched by investors as it helps determine dividend payouts, rose 58% from a year earlier to C$586 million ($428.27 million), beating Visible Alpha estimate of C$501.8 million.
The company’s total revenue rose about 28% to C$4.90 billion, compared with analysts average estimate of C$4.92 billion, according to 12 analysts polled by LSEG data. ($1 = 1.3683 Canadian dollars) (Reporting by Jaspreet Singh in Bengaluru; Editing by Krishna Chandra Eluri)
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Published: 25 Apr 2024, 12:02 AM IST
