Published February 22, 2012
TORONTO – Rogers Communications , Canada's largest wireless telecommunication company, reported a stronger than expected quarterly profit on Wednesday, driven by growth in its cable and media segments, even as its core wireless business lagged.
Toronto-based Rogers said its board has authorized an 11 percent increase in its quarterly dividend payout and a C$1 billion share buyback program that will allow the company to repurchase about 10 percent of its Class B outstanding shares.
Profit from its wireless business fell, reflecting high upfront costs tied to subsidising activations and lower average monthly bills for its more valuable postpaid subscribers.
Rogers activated a record number of iPhones and other smartphones but many existing customers defected to rivals. All told, the company added far fewer mobile customers than its two main competitors.
Rogers said it added 42,000 net postpaid subscribers in the quarter. In comparison, BCE's Bell Canada added 132,000 net postpaid subscribers and Telus grabbed 148,000 of those customers, who sign multi-year contracts and typically pay four times more a month than pre-paid users.
Rogers was initially the only Canadian wireless company to offer Apple's iPhone, giving it an early advantage. Bell and Telus have since built a shared national network that has helped them win market share.
At the same time, the three main providers are being pressured by smaller upstarts and regional cable operators that have begun offering wireless service since a 2008 government auction of airwaves.
Rogers' operating profit rose 2.8 percent to C$1.09 billion, as revenue from its cable, internet and media segments grew.
Adjusted net profit rose to C$372 million, or 70 Canadian cents a share, from C$338 million, or 60 Canadian cents.
Analysts, on average, had forecast earnings of 67 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Revenue rose to C$3.18 billion from C$3.14 billion.
Excluding stock-based compensation, costs related to pension obligations and other one-time items, the company expects 2012 operating profits of C$4.73 billion to C$4.92 billion.
Rogers' new quarterly dividend payout will be 39.5 Canadian cents a share, up from 35.5 Canadian cents a share. (Reporting by Euan Rocha and Alastair Sharp)