Time New York: Sun 04 Dec 17:24 pm  |  Save 15% on H&R Block Online

  
caticonslite_bm_alt

Rogers Communications (RCI) Lags Q3 Earnings Estimates

Zacks

Rogers Communications Inc. RCI reported mixed financial results in the third quarter of 2016, wherein the bottom line missed the Zacks Consensus Estimate while the top line surpassed the same.

Quarterly net income was approximately $167.2 million (down 53% year over year) or 63 cents per share (down 9% year over year). However, adjusted earnings per share were 60 cents, below the Zacks Consensus Estimate of 67 cents.

Quarterly total revenue came in at around $2,657 million, up 2.6% year over year and above the Zacks Consensus Estimate of $2,604 million.

Third-quarter adjusted operating profit was $1,052.6 million, up 3% year over year. Quarterly adjusted operating margin was flat with the year-ago quarter figure of 39.7%.


During the third quarter of 2016, Rogers Communications generated $900 million of cash from operations, reflecting a decrease of 18.6% year over year. Adjusted free cash flow was $454.5 million, down 10% year over year.

At the end of the first nine months of 2016, Rogers Communications had no cash and cash equivalents on its balance sheet compared with $11 million at the end of 2015. Total outstanding long-term debt was approximately $11,534.5 million compared with $12,061 million at the end of 2015. The debt-to-capitalization ratio was 0.79 compared with 0.80 at the end of 2015.

Wireless Segment

Quarterly total revenue came in at around $1,548.1 million, up 3% year over year. Service revenues totaled $1,427 million, up 6% from the year-ago quarter. Equipment sales were $120.8 million, down 19% year over year.

Quarterly adjusted operating profit for the segment was $671.8 million, up 1% year over year. Adjusted operating margin, as a percentage of service revenues, was 47.1% compared with 49.5% in the year-earlier quarter.

Quarterly blended ARPU (average revenue per user) was $47.35, up 2% year over year. As of Sep 30, 2016, the prepaid subscriber base totaled 1.679 million, up 6% from the year-ago quarter. Monthly churn rate was 3.49% versus 3.08% in the prior-year quarter.

As of Sep 30, 2016, Rogers Communications’ postpaid wireless subscriber base totaled 8.464 million, up 2.7% year over year. In the third quarter, the company added a net of 37,000 postpaid wireless subscribers. Quarterly postpaid ARPA (average revenue per account) was around $92.26, up 7.1% year over year. Monthly churn rate was 1.26% compared with 1.31% in the prior-year quarter.

Cable Segment

Quarterly total revenue came in at $657.4 million, down 1% year over year. Service revenues totaled $655.9 million, flat year over year. Of this, Internet revenues were $289.6 million, up 11% year over year. Television (Video) revenues were $294.1 million, down 7% year over year. Telephony revenues totaled $72.2 million, down 14% year over year. Equipment sales were $1.52 million, flat year over year.

Quarterly adjusted operating profit for the segment was $327.6 million, down 5% year over year. Adjusted operating margin was 49.8% in the reported quarter, compared with 47.8% in the year-ago quarter.

As of Sep 30, 2016, high-speed Internet subscriber count was 2.115 million, up 4.1% year over year. In the reported quarter, Rogers Communications added a net of 39,000 high-speed Internet customers. Video subscriber base totaled 1.833 million, down 4.5% year over year. The company lost 14,000 video subscribers in the third quarter. Telephony subscriber count was 1.090 million, down 1.3%. The company gained 5,000 telephony subscribers in the reported quarter.

Media Segment

Quarterly total revenue came in at $405.8 million, up 13% year over year. Quarterly adjusted operating profit was $60 million, up 36% year over year.

Business Solutions Segment

Quarterly total revenue came in at $72.2 million, up 1% year over year. Of the total, Next-generation revenues were $58.5 million, up 8%. Legacy revenues were $12.9 million, down 23% while Equipment revenues were $0.76 million, flat year over year. Quarterly adjusted operating profit was $23.6 million, flat year over year. Adjusted operating margin was 32.6% compared with 33.0% in the year-ago quarter.

Outlook

Rogers Communications continues to expect 2016 operating revenues, adjusted operating profit and free cash flow growth in the band of 1%–3% on a year-over-year basis.

Competition

Rogers Communication is in direct competition with the likes of Shaw Communications Inc. SJR, Telus Corp. TU and BCE Inc. BCE in the Canadian telecom market.

Rogers Communications currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.