Canada cable giant sees earnings snipped
Canada's surging cable TV business is finally showing signs of slowing with the rest of the economy.
Canadian wireless and cable giant Rogers Communications said Wednesday that first-quarter earnings slipped as higher wireless and cable revenue was offset by an advertising decline at its TV and print division.
Toronto-based Rogers posted a 10% profit decline of CAN$309 million ($252.5 million) for the period ending March 31.
Revenue rose 5% to CAN$2.75 billion ($2.25 billion), with wireless jumping 8% to CAN$1.54 billion ($1.26 billion) and cable revenue growing 7% to CAN$743 million ($607 million) on the back of higher basic cable and high-speed Internet sales.
But the media division saw revenue fall 9% to CAN$284 million ($232 million) as advertisers curbed expenditures on TV, radio and print ads.
Rogers also faced steep acquisition and retention costs to sign up smartphone users at its wireless division. The wireless giant no longer breaks out its mix of iPhone and BlackBerry users and indicated only that it signed or upgraded 360,000 smartphone users during the latest quarter.
Nadir Mohamed, Rogers' newly installed CEO, told analysts that his company faces economic head winds.
"While Rogers is operating from a position of business and financial strength, we are clearly negotiating through challenging times and have much hard work in front of us to drive the performance of the business forward," Mohamed said.
In addition to its cable, wireless phone and Internet access businesses, Rogers runs the Toronto Blue Jays baseball club, local radio and TV stations and 70 magazines — all of which are vulnerable in a consumer downturn. (partialdiff)
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