Rogers Communications Inc. will tighten its belt in the face of tough competition in the telecom industry that is translating into slower revenue growth for the company, shareholders were told Wednesday.
“In the short term, this means more aggressively managing our costs,” chief executive Nadir Mohamed said at Rogers’ annual meeting.
Shares in Rogers Communications Inc. fell about 5% in early afternoon trading after the telecom company missed analysts’ expectations on its first-quarter financial results.
Rogers’ stock was down $1.92 at $37.10 a share on the Toronto Stock Exchange.
The Toronto-based company’s wireless division has faced tougher cellphone competition from players big and small, while its cable division is battling fellow industry giant Bell.
Rogers laid off about 300 employees across its operations in March, with the cuts focused on management and head office positions.
Mohamed assured analysts late Tuesday that the telecom company intends to improve its earnings before the end of 2012, and he repeated the message at the annual shareholders’ meeting in Toronto.
“As I look to the balance of the year, I expect this competitive intensity to continue, and with moderating revenue growth…cost management is absolutely imperative,” he said at the meeting, which was also webcast.
Rogers posted an adjusted profit of $356 million, a drop of 16% from $423 million in the same quarter last year.
Revenue of $2.95 billion also missed analyst expectations and came in 1% below the $2.99 billion reported in the same period in 2011. Analysts had estimated revenue of $3.05 billion for the first quarter of fiscal 2012.
Mohamed also announced that Rogers’ cable TV service will move to Internet Protocol TV (IPTV) over the next two years, a service that Telus and Bell already have. That means TV will be delivered over an Internet Protocol network and allow users to watch sports, for example, while pulling up stats.
“Think about it as one big pipe into the home, a pipe that will allow consumers to access any type of content and entertainment whether it’s broadcast, on demand, or user generated. In the future your TV and your computer will be one and the same.”
In its first quarter, Rogers said it lost 7,000 cable customers in a seasonally slow but highly competitive quarter.
