U.S. Markets open in 7 hrs 46 mins

Rogers 1Q Earnings Miss Estimate

Zacks Equity Research

Rogers Communications Inc. (RCI) declared its first-quarter 2013 financial results, where both the top and the bottom lines missed the Zacks Consensus Estimate.

Quarterly net income was $410.8 million or 79 cents per share compared with a net income of $357.2 million or 68 cents per share in the year-ago quarter. The first-quarter adjusted EPS was 78 cents, missing the Zacks Consensus Estimate by a penny. Quarterly total revenue was $3,003.7 million, up 3% year over year, but below the Zacks Consensus Estimate of $3,024 million.

First-quarter operating profit was $1,169.9 million, up 8% year over year. Quarterly operating margin was 38.9% compared with 37.2% in the year-ago quarter.

During the first quarter of 2013, Rogers Communications generated $798.8 million of cash from operations compared with $523.9 million in the year-ago quarter. Free cash flow during the reported quarter was a negative $338.4 million compared with $78.4 million in the year-ago quarter.

At the end of first quarter fiscal 2013, Rogers Communications had $1,423 million of cash and marketable securities on its balance sheet as compared with $211.4 million at the end of fiscal 2012. Total outstanding debt, at the end of the reported quarter, was $10,328.9 million compared with $10,360.6 million at the end of fiscal 2012. At the end of the reported period, the debt-to-capitalization ratio was 0.72 compared with 0.74 at the end of fiscal 2012.

Wireless Segment

Quarterly total revenue was $1,746.4 million, up 3% year over year. Network revenue was $1,670 million, up 4% year over year. Equipment sales were $76.4 million, down 18% year over year.

Quarterly adjusted operating profit for the entire segment was $759.1 million, up 4% year over year. Adjusted operating margin was 43.5% in the first quarter of 2013 compared with 43.2% in the year-ago quarter. In the same time frame, Wireless Data revenue was $756.1 million, up 22% year over year. Wireless Data revenue represented around 45% of total wireless network revenue compared with 39% in the prior-year quarter.

During the first quarter of 2013, the Wireless segment activated record 673,000 smartphones, up 4.8% year over year. Most of these smartphones are either iPhone of Apple Inc. (AAPL), Blackberry of Blackberry Ltd. (BBRY) or Google Inc. (GOOG) developed Android-based handsets. Quarterly consolidated ARPU (average revenue per user) was $59.2, up 2% year over year.

During the reported quarter, Postpaid retail subscribers’ base was around 7.878 million, up 3.4% year over year. Smartphone customers now constituted a record 71% of the overall postpaid subscribers compared with 60% in the year-ago quarter. Quarterly Postpaid ARPU was $68, up 1.2% year over year. Monthly churn rate was 1.2% compared with 1.3% in the prior-year quarter.

Prepaid subscribers’ base was around 1.498 million, down 11.3% year over year. Quarterly Prepaid ARPU was $14.5, down 0.4% year over year. Monthly churn rate was 4.5% compared with 4.3% in the prior-year quarter.

Cable Segment

Quarterly total revenue was $854.4 million, up 4% year over year. Basic cable operations revenue was $454.5 million, down 2% year over year. Internet revenue was $274.9 million, up 15% year over year. Home Telephony revenue was $122.1 million, up 6% year over year. Quarterly adjusted operating profit for the whole segment was $425.7 million, up 13% year over year. Adjusted operating margin was 49.8% in the reported quarter compared with 45.8% in the year-ago quarter.

At the end of first-quarter fiscal 2013, Cable TV subscribers’ base was around 3.828 million, up 1.7% year over year. High-speed Internet subscribers’ base was 1.89 million, up 4.4% year over year. Digital cable subscriber base now constituted 81% of the overall total television subscriber base compared with 78% in the year-ago quarter.

Media Segment

Quarterly total revenue was $338.4 million, down 4% year over year. Quarterly adjusted operating loss was $6.9 million, down 50% year over year.

RBS Segment

Quarterly total revenue was $92.3 million, up 7% year over year. Quarterly adjusted operating profit was $22.8 million, up 28% year over year.

Currently, Rogers Communications has a Zacks Rank #3 (Hold).

Read the Full Research Report on GOOG

Read the Full Research Report on AAPL

Read the Full Research Report on RCI

Read the Full Research Report on BBRY

Zacks Investment Research



More From Zacks.com