Shaw Communications Inc.
) is slated to release its first-quarter fiscal 2013 results on
Wednesday, January 9, before the opening bell. The Zacks
Consensus Estimate for the quarter is pegged at 45 cents down
1.86% from the year-ago quarter.
With respect to earnings surprises, Shaw Communications has
outperformed the Zacks Consensus Estimate in three of the last
four quarters with an average beat of 3.82%.
Fourth Quarter Recap
On October 25, Shaw Communications reported its fourth-quarter
2012 financial results. Quarterly GAAP net income was
approximately $131.4 million or 28 cents per share compared with
a net income of $167 million or 37 cents per share in the
prior-year quarter. However, adjusted earnings per share
(excluding special items) of 28 cents in the reported quarter
beat the Zacks Consensus Estimate by a penny.
Quarterly net revenue inched up 2.5% year over year to $1,196
million, surpassing the Zacks Consensus Estimate of $1,170
million. Quarterly operating income before amortization climbed
4.2% year over year to $495 million. Quarterly operating margin
stood at 41.4% compared with 40.7% in the prior-year quarter.
Factors Impacting Earnings
Similar to the previous quarter the company continues to
struggle in its cable TV business. The company's cable operation
is facing severe competition from IPTV service provider like
) popular Optik TV which supports over 400 digital channels and
more than 100 HD channels.
However, in the reported quarter Shaw Communications has
performed impressively with respect to net customer additions on
several fronts. The company has improved on its EBITDA margin and
free cash flow due to the discontinuation of promotional
activities. Additionally, the acquisition of Canwest Global
Communications Corp. is expected to position the company as one
of the leading entertainment and communications companies in the
Canadian broadcasting industry.
For fiscal 2013, in the last 30 days, out of the total 9
estimates, 2 estimates moved north while one moved south. For
fiscal 2014, out of the 7 estimates, 2 were revised upward, while
none moved downward over the same period. Estimates remained
unchanged at $1.59 and $1.65 for fiscal 2013 and 2014
Shaw Communications launched "Shaw Go" - an innovative TV
Everywhere service, which will be available on
) developed iPad 2 and iPhone 5. Going forward, the company will
also offer streaming live TV, on-demand content and several
family-focused programs through Shaw Go.
Based on these considerations, we retain our long-term
Outperform recommendation on Shaw Communications. The company
holds a short term Zacks #2 Rank (Buy).
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