Rogers Misses Earnings, Tops Rev

Zacks

Rogers Communications Inc. (RCI) declared its second-quarter 2013 financial results, where the bottom line missed the Zacks Consensus Estimate whereas the top line beat the same.

Quarterly net income was $477.1 million or 92 cents per share compared with a net income of $458.9 million or 87 cents per share in the year-ago quarter. The second-quarter adjusted EPS was 93 cents, missing the Zacks Consensus Estimate of 95 cents. Quarterly total revenue was $3,083.5 million, up 3% year over year, but above the Zacks Consensus Estimate of $3,066 million.

Second-quarter operating profit was $1,253.8 million, up 2% year over year. Quarterly operating margin was 40.7% compared with 41.1% in the year-ago quarter.

During the second quarter of 2013, Rogers Communications generated $1,018.6 million of cash from operations compared with $1,035.8.9 million in the year-ago quarter. Free cash flow during the reported quarter was a negative $514.6 million compared with $596.2 million in the year-ago quarter.

At the end of second-quarter fiscal 2013, Rogers Communications had $840 million of cash and marketable securities on its balance sheet as compared with $204.5 million at the end of fiscal 2012. Total outstanding debt, at the end of the reported quarter, was $10,125.1 million compared with $10,023.4 million at the end of fiscal 2012. At the end of the reported period, the debt-to-capitalization ratio was 0.33 compared with 0.35 at the end of fiscal 2012.

Wireless Segment

Quarterly total revenue was $1,740.5 million, up 3% year over year. Network revenues were $1,603.2 million, up 1% year over year. Equipment sales were $137.3 million, up 27% year over year.

Quarterly adjusted operating profit for the entire segment was $788.2 million, up 3% year over year. Adjusted operating margin was 49.2%, in the second quarter of 2013, compared with 48.2% in the year-ago quarter. In the same time frame, Wireless Data revenues were $733.4 million, up 18% year over year. Wireless Data revenues represented around 46% of total wireless network revenue compared with 39% in the prior-year quarter.

During the second quarter of 2013, the Wireless segment activated record 678,000 smartphones, up 7.8% year over year. Most of these smartphones were either iPhone of Apple Inc. (AAPL), Blackberry of Blackberry Ltd. (BBRY) or Google Inc. (GOOG) developed Android-based handsets. Quarterly consolidated ARPU (average revenue per user) or Blended ARPU was $56.9, down 0.3% year over year.

During the reported quarter, Postpaid retail subscribers’ base was around 7.976 million, up 3.5% year over year. Smartphone customers now constituted a record 72% of the overall postpaid subscribers compared with 63% in the year-ago quarter. Quarterly Postpaid ARPU was $64.7, down 1.1% year over year. Monthly churn rate was 1.17% compared with 1.15% in the prior-year quarter.

Prepaid subscribers’ base was around 1.442 million, down 12.2% year over year. Quarterly Prepaid ARPU was $15.2, down 0.1% year over year. Monthly churn rate was 4.1% compared with 4% in the prior-year quarter.

Cable Segment

Quarterly total revenue was $835.2 million, up 3% year over year. Basic cable operations revenues were $438.7 million, down 4% year over year. Internet revenues were $275.5 million, up 17% year over year. Home Telephony revenues were $120 million, up 4% year over year. Quarterly adjusted operating profit for the whole segment was $413.8 million, up 7% year over year. Adjusted operating margin was 49.5%, in the reported quarter, compared with 47.8% in the year-ago quarter.

At the end of second-quarter fiscal 2013, Cable TV subscribers’ base was around 3.909 million, up 3.5% year over year. High-speed Internet subscribers’ base was 1.93 million, up 6.3% year over year. Digital cable subscriber base now constituted 82% of the overall total television subscriber base compared with 79% in the year-ago quarter.

Media Segment

Quarterly total revenue was $451.2 million, up 7% year over year. Quarterly adjusted operating profit was $61.4 million, down 19% year over year. Adjusted operating margin was 13.6%, in the reported quarter, compared with 18% in the year-ago quarter.

RBS Segment

Quarterly total revenue was $86.4 million, flat year over year. Quarterly adjusted operating profit was $24 million, up 14% year over year.


Currently, Rogers Communications has a Zacks Rank #3 (Hold).
 

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