Rogers Misses on Earnings and Rev - Analyst Blog

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Rogers Communications Inc. ( RCI ) declared third-quarter 2013 financial results, where both its top and bottom line missed the Zacks Consensus Estimate.

Quarterly net income was $476 million or 92 cents per share compared with $470.3 million or 91 cents in the year-ago quarter. However, the adjusted EPS fell short of the Zacks Consensus Estimate of 95 cents. Quarterly total revenue was $3,063 million, up 2% year over year, but below the Zacks Consensus Estimate of $3,145 million.

Third-quarter operating profit was $1,274 million, up 4% year over year. Quarterly operating margin was 41.6% compared with 40.5% in the year-ago quarter.

During the third quarter of 2013, Rogers Communications generated $999.4 million of cash from operations compared with $1,088.7 million in the year-ago quarter. Free cash flow was a negative $478.8 million against $587.1 million in the year-ago quarter.

At the end of third-quarter fiscal 2013, Rogers Communications had $801.8 million of cash and marketable securities on its balance sheet as compared with $202.4 million at the end of fiscal 2012. Total outstanding debt was $9,945.6 million versus $9,919 million at the end of fiscal 2012. The debt-to-capitalization ratio was 0.70 compared with 0.73 at the end of fiscal 2012.

Wireless Segment

Quarterly total revenue was $1,753.7 million, down 2% year over year. Network revenues were $1,639.7 million, down 1% from the year-ago quarter. Equipment sales were $114 million, down 17% year over year.

Quarterly adjusted operating profit for the entire segment was $831.3 million, up 4% year over year. Adjusted operating margin was 47.4%, in the third quarter of 2013, compared with 44.6% in the year-ago quarter. In the same time frame, Wireless Data revenues were $782.8 million, up 15% year over year. Wireless Data revenues represented around 48% of total wireless network revenue against 41% in the prior-year quarter.

During the third quarter of 2013, the Wireless segment activated 574,000 smartphones against 707,000 in the prior-year quarter. Most of the smartphones were either Apple Inc. 's ( AAPL ) iPhones, BlackBerry Ltd. 's ( BBRY ) BlackBerry or Google Inc. ( GOOG ) developed Android handsets. Quarterly consolidated ARPU (average revenue per user) or Blended ARPU was $57.8, down 1.8% year over year.

At the end of the reported quarter, Postpaid retail subscribers' base stood at 8.040 million, up 3.2% year over year. Smartphone customers constituted a record 73% of the overall postpaid subscribers as against 65% in the year-ago quarter. Quarterly Postpaid ARPU was $68.77, down 3.8% year over year. Monthly churn rate was 1.23% versus 1.34% in the prior-year quarter.

Prepaid subscribers' base was around 1.458 million, down 11.3% from the year-ago quarter. Quarterly Prepaid ARPU was $16.84, up 0.7% year over year. Monthly churn rate was 3.33% against 3.77% in the prior-year quarter.

Cable Segment

Quarterly total revenue was $829.4 million, up 4% year over year. Basic cable operations revenues were $429.4 million, down 3% from the year-ago quarter. Internet revenues were $279.3 million, up 18% year over year. Home Telephony revenues were $118.8 million, up 5% year over year. Quarterly adjusted operating profit for the whole segment was $403.8 million, up 5% year over year. Adjusted operating margin was 48.7%, in the reported quarter, compared with 48.1% in the year-ago quarter.

At the end of third-quarter fiscal 2013, Cable TV subscribers' base stood at 3.956 million, up 4h.1% year over year. High-speed Internet subscribers' base was 1.94 million, up 5.6% year over year. Digital cable subscribers' base constituted 83% of the overall total television subscriber base compared with 79% in the year-ago quarter.

Media Segment

Quarterly total revenue was $418 million, up 12% year over year. Quarterly adjusted operating profit was $52.3 million, up 10% year over year. Adjusted operating margin was 12.5%, in the reported quarter, compared with 12.8% in the year-ago quarter.

RBS Segment

Quarterly total revenue was $88.4 million, up 8% year over year. Quarterly adjusted operating profit was $27.6 million, up 32% from the prior-year quarter. Adjusted operating margin was 31.2%, in the reported quarter, compared with 25.6% in the year-ago quarter.

Outlook

Rogers slashed its outlook for tax payments for the full-year 2013 to $500 million from its earlier guidance of $650 million to $700 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

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