Shaw Communications Inc.
(
SJR
) declared solid financial results for the fourth quarter of
fiscal 2012. GAAP net income from continuing operations was
$131.4 million, down 20.4% year over year. GAAP net earnings per
share were 28 cents, down 24.3% year over year. However, the
fourth-quarter net earnings per share of 28 cents beat the Zacks
Consensus Estimate by a penny. Quarterly total revenue of
approximately $1,196 million inched up 2.5% year over year,
beating the Zacks Consensus Estimate of $1,170 million.
Quarterly operating income before amortization was around $495
million, up 4.2% year over year. Quarterly operating margin stood
at 41.4% compared with 40.7% in the prior-year quarter. In the
fourth quarter of fiscal 2012, Shaw Communications generated
around $351 million of cash from operations, remaining same year
over year. Free cash flow in the reported quarter was
approximately $102 million compared with $48.4 million in the
year-ago quarter.
At the end of fiscal 2012, Shaw Communications had cash &
cash equivalents of $422 million compared with $443.7 million at
the end of fiscal 2011. At the end of fiscal 2012, Shaw
Communications had $5,201.4 million in outstanding debt compared
with $5,265 million at the end of fiscal 2011.
Debt-to-capitalization ratio at the end of fiscal 2012 was 0.54
compared with 0.57 at the end of fiscal 2011.
Subscribers Statistics
As on August 31, 2012, Basic Cable customer base was
2,219,072, reflecting a net reduction of 16,474 customers in the
previous quarter. Digital TV customer base was 1,917,857,
representing a net deletion of 7,907 customers. Digital TV
penetration rate is now 86.4% of basic TV. Internet customer base
stood at 1,912,230, reflecting quarterly net addition of 6,062
customers. Digital phone lines were 1,363,744, reflecting a
year-over-year net addition of 24,185 lines. DTH customer base
was 910,023, representing a quarterly net addition of 1,155
customers.
Cable Segment
Quarterly revenue was $793.6 million, up 2.4% year over year.
Strong revenue growth was attributable to subscriber addition and
rate increases. Quarterly operating income before amortization
was $391.4 million, remaining same year over year.
Satellite Segment
Quarterly total revenue of $210.5 million was up 2.9% year
over year. Within this segment, DTH revenue was $190.7
million, up 3.2% year over year and Satellite Services revenue
was $19.8 million, remaining flat year over year. The
segment's quarterly operating income before amortization was
$76.1 million, up 5.5% over the year-ago quarter.
Media Segment
Quarterly total revenue was $214.5 million, up 3.3% year over
year. Operating income before amortization was $27.7 million, up
a whopping 133.3% year over year.
Our Recommendation
Currently, Shaw Communicationshas a Zacks #3 Rank, implying a
short-term Hold rating on the stock. Moreover, considering the
fundamentals, we retain a long-term Outperform recommendation.
This was primarily based on the company's improving EBITDA margin
and free cash flow due to the discontinuation of promotional
activities. Moreover, Shaw Communications launched "Shaw Go", -
an innovative TV Everywhere service, which will be available on
Apple Inc.
(
AAPL
) developed iPad 2 and iPhone 5.
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