Shaw Communications Inc.
(
SJR
) declared solid financial results for the third quarter of fiscal
2012. GAAP net income from continuing operation was $248.4 million,
up 22.2% year over year. GAAP net earnings per share were 53 cents,
up 17.8% year over year. However, the third-quarter adjusted net
earnings per share were 47 cents, well above the Zacks Consensus
Estimate of 42 cents. Quarterly total revenue of approximately
$1,280 million inched down 0.5% year over year, but was in line
with the Zacks Consensus Estimate of $1,278 million.
Quarterly operating income before amortization was around $568
million, down 3.2% year over year. Quarterly operating margin stood
at 44.4% compared with 45.6% in the prior-year quarter. In the
third quarter of fiscal 2012, Shaw Communications generated $350.5
million of cash from operations compared with $369.6 million in the
year-ago quarter. Free cash flow in the reported quarter was
approximately $195.3 million compared with $228.3 million in the
year-ago quarter.
At the end of the reported quarter, Shaw Communications had cash
& cash equivalents of $252.4 million compared with $443.7
million at the end of fiscal 2011. At the end of the reported
quarter, Shaw Communications had $5,269 million in outstanding debt
compared with $5,265 million at the end of fiscal 2011.
Debt-to-capitalization ratio at the end of the third quarter of
fiscal 2012 was 0.55 compared with 0.57 at the end of fiscal
2011.
Subscribers Statistics
At the end of the third quarter of 2012, Basic Cable customer
base was 2,235,546, reflecting a net reduction of 21,515 year over
year. Digital TV customer base was 1,925,764, representing a net
addition of 246 year over year. Digital TV penetration rate is now
86.1% of basic TV. Internet customer base stood at 1,906,168,
reflecting quarterly net reduction of 429. Digital phone lines were
1,339,559, reflecting year-over-year net addition of 29,142. DTH
customer base was 908,868, representing quarterly net reduction of
1,820.
Cable Segment
Quarterly revenue was $795.2 million, up 1.1% year over year.
Strong revenue growth was attributable to subscriber addition and
rate increases. Quarterly operating income before amortization was
$377.6 million, down 3.8% year over year.
Satellite Segment
Quarterly total revenue of $211.3 million was up 0.5% year over
year. Within this segment, DTH revenue was $190.3 million, up
0.5% year over year and Satellite Services revenue was $21 million,
remaining flat year over year. The segment's quarterly
operating income before amortization was $76.1 million, and
remained unchanged from the year-ago quarter.
Media Segment
Quarterly total revenue was $295.4 million, down 5.4% year over
year. Operating income before amortization was $114.2 million, down
3.4% year over year.
Our Recommendation
Currently, Shaw Communicationshas a Zacks #3 Rank, implying a
short-term Hold rating on the stock. We currently assigned a
long-term Underperform recommendation. Although Shaw Communications
offers triple-play cable TV and satellite TV, Internet, and
wireline phone services, its main competitor
Telus Corp.
(
TU
) offers Cable TV, Internet, wireline, and wireless services. Telus
shares a national wireless network with Bell Canada, a division of
BCE Inc.
(
BCE
). Its popular Optik TV, offering IPTV services, is quickly eroding
Shaw's market share.
BCE INC (BCE): Free Stock Analysis Report
SHAW COMMS-CL B (SJR): Free Stock Analysis
Report
TELUS CORP (TU): Free Stock Analysis Report
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