Shaw Communications Inc. says softness in the advertising market has continued to press on its media and cable divisions, causing the company to revise its outlook for the financial year ending Aug. 31.
The Calgary-based cable, internet, satellite and television company said Friday that it now expects free-cash flow for fiscal 2012 will be $450 million – about $100 million less than guidance issued in January.
On the Toronto Stock Exchange, Shaw shares were down 81 cents, or 3.9%t, at $19.50 in morning trading.
For the second-quarter ended Feb. 29, Shaw’s profit rose 3.5% as revenue grew at its cable and satellite TV divisions. Net income from continuing operations was $178 million or 38 cents per share.
The Calgary-based company’s revenue was up 3% to $1.23 billion.
The cable division accounted for $804 million of the revenue, or more than half, and the satellite division contributed $211 million.
Shaw’s media division, created by its acquisition of the Canwest television business, contributed $242 million of revenue in the quarter.
The company’s results were in line with estimates compiled by Thomson Reuters.
“We continue to execute on our strategic initiatives in this highly competitive environment, focusing on technology, customer service and value leadership,” Shaw CEO Brad Shaw said in a statement.
“Our focus is showing results as we gained momentum in subscriber growth during the quarter.”
Shaw and other major Canadian media companies face stepped up competition since BCE announced plans to take over specialty TV and radio station owner Astral Media for $3.4-billion.
Shaw got into the media business through its $2-billion acquisition of Canwest Global broadcasting assets in 2010. Its Global Television holdings include 11 conventional TV stations across the country and a group of specialty channels, including Showcase, MovieTime and HGTV.
Last year, Shaw decided to retreat from its push into the cellphone business and write down the value of related assets.
Instead, it has opted to establish an extensive Wi-Fi network that will let customers use Shaw services outside the home – at coffee shops, shopping malls and other “hotspots.”
