Rogers beats expectations
Cost-cutting and iPhone sales continue to pay off, even as print, radio and TV revenues take a hit.
Cost-cutting and higher Apple iPhone sales helped Rogers Communications post better-than-expected third-quarter earnings Tuesday.
Rogers saw earnings edge 2% lower to $485 million during the three months to Sept. 30, against $495 million in the same period in 2008. But with one-time adjustments, Rogers’ profit line was $505 million, or 82 cents a share, well up from an analyst-adjusted profits forecast of 54 cents.
That profit performance came on overall revenue of $3.04 billion, up 2% a year-earlier $2.98 billion. The Rogers Wireless phone division posted overall revenue up 2% to $1.76 billion, and the Rogers Cable division saw revenue rise 7% to $773 million on subscriber growth that offset lower new product sales during the economic downturn.
At the same time, Rogers’ advantage from selling the iPhone in Canada is set to disappear as rivals Bell Canada and Telus also start marketing the Apple smartphone to their customers.
Further, the Rogers Media division, which includes radio, TV and print operations, continues to sustain lower advertising sales, as overall third quarter revenue fell 6% to $364 million.
Rogers singled out The Shopping Channel as hit hard by lower discretionary consumer spending, a legacy of the late 2008 market meltdown.
To absorb the advertising slump and other market headwinds, Rogers continues to trim costs.
Rogers CEO Nadir Mohamed told analysts that a range of management jobs above the vice-president level had been culled at the wireless and cable divisions to keep operating costs in line with overall revenues.
The company recorded $11 million in restructuring and severance costs during the latest quarter.
Stock in Rogers surged by $1.28, or 4.4% to $30.18 during late-morning trading on the Toronto Stock Exchange.
From Playback Daily