Rogers reports solid Q1 results

by Gaurav Kheterpal on April 27, 2011

Rogers Communications Inc. ‘s (RCI) yesterday reported first-quarter profit that beat analysts’ estimates, thanks largely due to explosive growth in its lucrative postpaid wireless business. Rogers, Canada’s largest carrier, continued to expand its sizable smartphone customer base and sold 190,000 smartphones to new customers in the quarter.

Several analysts had warned of Rogers missing the cut in wake of aggressive competition amongst wireless competitors and a host of new adventures such as Chatr Wireless that threaten many of its core divisions. However, Rogers’ latest financial results indicate the carrier maintained solid top-line growth rates despite new entrants like Wind Mobile and Mobilicity resorting to sell far cheaper wireless services throughout major markets.

Net income at Rogers, was $335 million or 60 cents per share, down from $368 million or 62 cents a share in the same quarter last year, largely due to $99 million repayment of long-term debt. Adjusted net income was $423 million or 76 cents per share, marginally ahead of 72 cents per share that analysts expected. Total revenues climbed to $2.987 billion, in line with quarterly estimates. The company says it faced higher costs to recruit new smartphone subscribers and reduce churn, and increased rights costs for NBA and NFL programming for its Rogers Sportsnet regional sports cable channel.

Rogers’ will take heart from the fact that its wireless revenues shot up to $1.72 million.  The carrier proudly announced 45 per cent of its more than nine million subscribers now use smartphones like the iPhone and BlackBerry. Rogers added 35,000 net new customers, including contract and non-contract subscribers. Analysts expected Rogers to add nearly 25,000 new customers. In total, the carrier activated and upgraded 534,000 additional smartphones, substantially higher than 348,000 in the same quarter in 2010. Since the carrier was forced to spend heavily on smartphone subsidies, the company’s adjusted operating profit wireless division actually fell 5 per cent year over year.

Rogers’ management said they are happy with the continued strong growth in wireless data revenues. The carrier says it’s planning to upgrade non smartphone users to BlackBerry or iPhone smartphones sooner instead of waiting until their contract is up. Rob Bruce, president of the wireless division, believes this move would help prevent customers from going to another wireless provider. Rogers says postpaid subscribers are crucial to its business as they generally pay more per month than prepaid customers, who pay in advance for a preset amount of service.

A complete transcript of the Earnings call is available here.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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WIND Mobile Claims To Be The Fastest Growing Wireless Carrier In Canada —
August 16, 2012 at 5:39 am

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