Quebecor Inc. says its profits fell while costs rose in the second quarter as the media company works on the launch of several new channels, including Sun News.
The Montreal-based multimedia company said Wednesday it made $55.2 million in net income in the second quarter, or 86 cents per share.
That compares with $60.8 million, or 95 cents per share, in the second quarter of 2010.
On an adjusted basis, earnings were 93 cents per share, above analyst expectations of 84 cents, according to a poll from Thomson Reuters.
Quebecor also recorded revenues of $1.05 billion, a gain of $59.4 million from the same period last year.
“Attesting to the success of the corporation’s investment and development strategy, revenues grew in all business segments despite aggressive competition in many of those segments,” said president and CEO Pierre Karl Peladeau, in a release.
In its news division, operating income slipped 19.7% to $267.5 million, while broadcasting income dropped 17.1% to $117.5 million.
“The corporation pressed ahead with its investment plan in the News Media segment with a view to increasing and diversifying its revenue streams,” Peladeau said.
“While the spending is impacting the segment’s financial results for now, it is essential to our long-term growth.”
TVA Group Inc., a division of Quebecor, announced on Monday it will suspend its dividend payments as the broadcaster spends more to launch several new channels, including Sun News.
Quebecor’s wireless business, launched last fall, competes with Rogers, Bell, Telus and new player Public Mobile for cellphone customers in the province.
Quebecor’s strategy is to sell its services in bundles and offers its best monthly cellphone plans to customers that take its home phone, TV and internet services as well as its wireless service.
