Rogers Communications Misses on Q2 Earnings and Revenues - Analyst Blog

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Rogers Communications Inc. ( RCI ) declared second-quarter 2014 financial results, wherein both its top and bottom line missed the Zacks Consensus Estimate. 

Quarterly net income stood at $371.4 million or 69 cents per share compared with $487.8 million or 85 cents in the year-ago quarter. Moreover, adjusted earnings per share of 77 cents missed the Zacks Consensus Estimate of 80 cents. Quarterly total revenue stood at $2,945.4 million, flat year over year. However, the figure missed the Zacks Consensus Estimate of $2,962 million.  

Second-quarter operating profit came in at $1,204 million, up 1% year over year. Quarterly operating margin stood at 40.9% compared with 40.7% in the year-ago quarter.

During the second quarter of 2014, Rogers Communications generated $1,102.3 million of cash from operations compared with $972.9 million in the year-ago quarter. Free cash flow was $574 million against $491.5 million in the year- earlier quarter.

At the end of second-quarter of 2014, Rogers Communications had $8.3 million of cash and marketable securities on its balance sheet compared with $2,110 million at the end of fiscal 2013. Total outstanding debt stood at $12,228.2 million versus $11,162.6 million at the end of fiscal 2013. The debt-to-capitalization ratio stood at 0.72, flat as compared with fiscal 2013.

Wireless Segment

Quarterly total revenue came in at $1,650.6 million, down 1% year over year. Network revenues totaled $1,535.1 million, flat year over year. Equipment sales were $115.5 million, down 12% year over year.

Quarterly adjusted operating profit for the entire segment was $773 million, up 3% year over year. Adjusted operating margin was 46.8% in the second quarter of 2014, compared with 45.3% in the year-earlier quarter. Over the same time frame, Wireless Data revenues came in at $782.9 million, up 11% year over year. Wireless Data revenues represented around 51% of the total wireless network revenue against 46% in the prior-year quarter.

During the second quarter of 2014, the Wireless segment activated 588,000 smartphones against 678,000 in the year-earlier quarter. Most of the smartphones were either Apple Inc. ( AAPL ) iPhones, Black Berry Ltd. ( BBRY ) devices or Google Inc. ( GOOG ) developed Android handsets. Quarterly consolidated ARPU (average revenue per user) or Blended ARPU was $54.3, down 0.2% year over year.

During the reported quarter, Postpaid retail subscribers base stood at 8.114 million, up 1.7% year over year. Smartphone customers constituted a record 76% of the overall postpaid subscribers as against 72% in the year-ago quarter. Quarterly Postpaid ARPU was $60.9, down 1.4% year over year. Monthly churn rate stood at 1.1% versus 1.20% in the prior-year quarter.

Prepaid subscriber base totaled 1.325 million, down 8.1% from the year-ago quarter. Quarterly Prepaid ARPU was $14.1, down 2.5% year over year. Monthly churn rate was 3.92% against 4.13% in the prior-year quarter.

Cable Segment

Quarterly total revenue came in at $800 million, flat year over year. Basic cable operations revenues totaled $400.7 million, down 4% from the year-ago quarter. Internet revenues were $286.1 million, up 9% year over year. Home Telephony revenues were $111 million, down 3% year over year. Quarterly adjusted operating profit for the whole segment stood at $387.9 million, down 2% year over year. Meanwhile, adjusted operating margin stood at 48.5%, in the reported quarter, compared with 49.5% in the year-ago quarter.

At the end of second-quarter 2014, Cable TV subscriber base stood at 4.004 million, up 2.6% year over year. High-speed Internet subscriber base was 1.98 million, up 2.6% year over year. Digital cable subscriber base now constituted 86% of the total television subscriber base compared with 82% in the year-ago quarter.

Media Segment

Quarterly total revenue came in at $435.6 million, up 1% year over year. Quarterly adjusted operating profit was $49.5 million, down 16% year over year. 

RBS Segment

Quarterly total revenue came in at $87.1 million, up 6% year over year. Quarterly adjusted operating profit was $25.7 million, up 12% from the prior-year quarter. Adjusted operating margin stood at 29.5%, in the reported quarter, compared with 27.8% in the year-ago quarter.

Outlook

Rogers Communications expects adjusted operating profit for full-year fiscal 2014 in the range of $4,838.5-$4,983.7 million. The company also expects after-tax free cash flow  in between $1,379 million and $1,451.6 million while capital expenditure for the full year is expected in the band of $2,201.5-$2,298.3 million.

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


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AAPL , RCI , BBRY , GOOG

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