The new CEO of Rogers Communications says he’s not satisfied with the company’s fourth-quarter results after its profit and revenue were hit by lower prices and margins in its wireless division.
Rogers\’ new CEO Guy Laurence
Guy Laurence, who took over from former chief executive Nadir Mohamed, said Wednesday that Rogers’ growth has slipped compared to its peers, referring to Bell and Telus.
Laurence said he expects to deliver his strategy for the Toronto-based telcommunications and media company in May, noting the industry faces moderate growth and regulatory uncertainty.
“However, I will say that with respect to the results of Q4 and certain of the trends that, while there are areas of strength overall, they’re not satisfactory to me and over time I expect to do better,” Laurence told analysts on his first conference call with financial analysts.
“Our margins, cash flows and return on assets are strong, but we slipped in terms of our growth rates relative to our peers and we need to execute in even a more methodical and disciplined manner as we go forward.”
He pledged to improve customer service, which some analysts have noted needs work.
“We have opportunities to put our customers needs more front and centre in everything we do to deliver a better, more consistent experience,” Laurence said.
The company also announced two initiatives that are geared to its shareholders – a 5% increase in its dividend and renewed share buyback program.
Still, Rogers stock was down 5.2%, or $2.39, to $43.30 in morning trading on the Toronto Stock Exchange.
Rogers reported $357 million or 69 cents per share of adjusted earnings for the three months ended Dec. 31 – below analyst estimates of 75 cents per share.
The quarter’s revenue also missed expectations falling 1% from a year earlier to $3.24 billion and below estimates of $3.3 billion.
Rob Bruce, head of Rogers’ communications division which includes wireless, said the short-term pain of reducing customer roaming rates has been significant and said he expects it will take a couple of quarters to turn around the situation. Rogers offers its customers a $7.99 U.S. roaming plan.
Roaming rates paid by cellphone users when they’re travelling in Canada and the U.S. are being reviewed by the CRTC, which could consider regulations as a result of consumer complaints.
Rogers, as well as Bell and Telus, introduced data sharing plans last summer that allow mobile phone and tablet users in a household to share one data package with a set amount of monthly data usage to do things like surf the Internet.
In its wireless division, Rogers added 34,000 net postpaid customers, who generally have lucrative smartphone contracts. That compares with net additions of 58,000 in the same quarter last year.
By comparison, BCE added 119,520 net postpaid customers in its fourth quarter.
Rogers said it cut its net loss of cable TV subscribers to 25,000 in the quarter, down from a loss of 28,000 year-over-year. Total cable subscribers as of Dec. 31 were 2.1 million compared with 2.2 million year-over-year.
The company added 13,000 net Internet customers versus 22,000 year-over-year. Total Internet subscribers were at 1.9 million compared with 1.8 million year-over-year.
In its financial results, Rogers net income before adjustments fell to $320 million or 62 cents per share from $522 million or $1.01 per shares in the fourth quarter of 2012.
The increased dividend will rise to 45.75 cents per share per quarter, or $1.83 per share on an annualized basis – up from the previous rate of $1.74 per year.
The share buyback will give Rogers the opportunity, but not the obligation, to repurchase and cancel shares.
