Rogers Communications Inc. had weaker profit and flat revenue in the second-quarter as the company faced tougher competition in key wireless and cable divisions.
The Toronto-based company said Tuesday that net income declined 2.4% to $400 million, or 75 cents per share, off from $410 million a year ago, or 74 cents per share.
The results beat analyst expectations on an adjusted basis, with net income of $478 million, or 91 cents per share, which is five cents higher than analysts expected, according to a survey by Thomson Reuters.
Revenue was $3.11 billion, up slightly from $3.1 billion in the comparable period, but below expectations of $3.14 billion.
The company has been cutting costs – it has eliminated more than 650 jobs so far this year – and wants to increase its revenues.
“To be clear, our definition of winning longer term is from top-line growth,” chief executive Nadir Mohamed said during a conference call to discuss the results.
“Where we saw stable or modest growth in wireless and cable in Q2, we’re committed to improving this trajectory.”
Rogers shares were up $2.03, or nearly 5.5%, to $39.27 in early trading on the Toronto Stock Exchange.
Revenue growth is expected to be stronger with more smartphone use by its customers, customer retention efforts and other growth initiatives, Mohamed told analysts.
Chief financial officer Anthony Staffieri said Rogers will maintain its financial guidance, which some analysts believed might be lowered due to pressures the company has been facing.
“We’re also not making any changes to our consolidated, adjusted operating profit and pre-tax free cash flow guidance ranges that we set out at the start of the year,” he said.
“We are focused on executing on our roadmap and we believe we will achieve our financial targets. There are obviously continued pressures facing our businesses, but we’re making meaningful progress around a number of cost management initiatives that we believe can offset the topline pressure that we have seen to date.”
In June, Rogers announced it was cutting 375 jobs due to tougher competition on all fronts. The reductions follow 300 job cuts announced in March.
Rogers added 87,000 post-paid net subscribers, a key measure of its competitive health. These customers are usually on three-year contracts on BlackBerry, Apple or Android smartphones.
Smartphones users are now 63% of Rogers’ postpaid subscriber base, up from 48% in the same quarter last year.
But Rogers’ monthly average revenue per user in its wireless division dropped to $68.46 in the quarter compared with $70.07 in the same quarter in 2011.
The cable division also lost 4,000 subscribers in the quarter due to the end of the post-secondary school year, which saw students move, and competition from Bell‘s Internet Protocol TV service.
Rogers is Canada’s largest cable TV operator and wireless operator and is a major magazine publisher, TV and radio broadcaster and owner of the Toronto Blue Jays.
It also owns a slate of print magazines including Maclean’s and Chatelaine.
