Cogeco earnings down, revenue up

Cable company's 3Q report shows subscriber growth

TORONTO – Despite continuing challenges in Portugal, Cogeco Cable on Thursday became the latest Canadian cable operator to beat the street as it unveiled flat third quarter earnings.

Montreal-based Cogeco posted CAN$31.2 million in earnings for the three months to May 31, just down from a profit of CAN$32.5 million in 2009.

The bottom line included a CAN$10.9 million favorable tax reduction for Cabovisao, Cogeco's struggling Portuguese cable division, and an unfavorable income tax adjustment of $6.1 million for tax losses at Cabovisao.

Overall revenue at Cogeco Cable rose 4% to CAN$319.3 million.

Cogeco surprised analysts with subscriber growth at Cabovisao.

"The Portuguese operations are continuing to show stabilization in terms of subscribers, which should eventually lead to stabilization financially and thus remove the drag from Portugal," Desjardins Securities analyst Maher Yaghi wrote Thursday to investment clients.

Cogeco CEO Louis Audet told analysts that, although Europe's economic downturn has challenged Cabovisao, "the competitive situation in Portugal appears to be settling down."

Cable giant Shaw Communications last week opened the current reporting period for cable and phone carriers by surpassing analyst forecasts with higher third quarter earnings from increased cable, digital phone and Internet offerings.