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Rogers Communications (RCI) Q4 Earnings & Revenues Top

Rogers Communications Inc.RCI , the largest integrated telecom operator in Canada, reported impressive financial results for the fourth quarter (ended Dec 31, 2016). Both the bottom line and the top line came in better than expected.

Inspite of such impressive financial results, the company continues to face tough competition from market incumbents like TELUS Corp. TU and BCE Inc. BCE , and other small regional cable TV operators in the wireless market of Canada. Moreover, Shaw Communications Inc.'s SJR entry into the market with the WIND Mobile acquisition has intensified competition. Hence, the company currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Net Income

Quarterly net income was approximately $286.1 million compared with $247.88 million in the year-ago quarter. Adjusted earnings per share of 55 cents beat the Zacks Consensus Estimate of 52 cents.

Revenue

Quarterly total revenue came in at around $2,628.6 million, up 1.67% year over year and above the Zacks Consensus Estimate of $2,619 million.

Operating Metrics

Fourth-quarter adjusted operating profit was $942.87 million, up 3% year over year. Quarterly adjusted operating margin was 35.9% versus 35.5% with the year-ago quarter.

Cash Flow

During the fourth quarter of 2016, Rogers Communications generated $788.59 million of cash from operations compared with $711.46 million at the end of Dec 2015. Adjusted free cash flow was $293.57 million compared with $205.2 million in the year-ago quarter.

Liquidity

At the end of 2016, Rogers Communications had no cash and cash equivalents on its balance sheet compared with $8.24 million at the end of 2015. Total outstanding long-term debt was approximately $11,480.6 million compared with $11,885 million at the end of 2015.

Wireless Segment

Quarterly total revenue came in at around $1,541.2 million, up 4% year over year. Service revenues totaled $1,391.5 million, up 6% from the year-ago quarter. Equipment sales were $149.78 million, down 15% year over year.

Quarterly adjusted operating profit for the segment was $593.1 million, up 5% year over year. Adjusted operating margin, as a percentage of service revenues, was 42.6% compared with 43.2% in the year-earlier quarter.

Quarterly blended ARPU (average revenue per user) was $45.47, up 2.6% year over year. As of Dec 31, 2016, the prepaid subscriber base totaled 1.717 million, up 7% from the year-ago quarter. Monthly churn rate was 2.62% compared with 3.17% in the prior-year quarter.

As of Dec 31, 2016, Rogers Communications' postpaid wireless subscriber base totaled 8.557 million. In the fourth quarter, the company added a net of 286,000 postpaid wireless subscribers. Quarterly postpaid ARPA (average revenue per account) was around $89.79, up 7% year over year. Monthly churn rate was 1.35% flat year over year.

Cable Segment

Quarterly total revenue came in at $642.6 million compared with $640.3 million in the year-ago quarter. Service revenues totaled $641.8 million, flat year over year. Of this, Internet revenues were $283 million, up 9% year over year. Television (Video) revenues were $289 million, down 4% year over year. Telephony revenues totaled $69.6 million, down 9% year over year. Equipment sales were $0.75 million, down 50% year over year.

Quarterly adjusted operating profit for the segment was $325.77 million, up 2% year over year. Adjusted operating margin was 50.7% compared with 49.8% in the year-ago quarter.

As of Dec 31, 2016, high-speed Internet subscriber count was 2.145 million, up 4.7% year over year. Rogers Communications added a net of 97,000 high-speed Internet customers in the quarter. Video subscriber base totaled 1.820 million, down 4% year over year after a loss of lost 76,000 users. Telephony subscriber count was 1.094 million, up 0.4%. The company gained 4,000 telephony subscribers in the reported quarter.

Media Segment

Quarterly total revenue came in at $411.89 million, down 1.78% year over year. Quarterly adjusted operating profit was $36.69 million, down 13% year over year.

Business Solutions Segment

Quarterly total revenue came in at $71.89 million, up 1.04% year over year. Of the total, Next-generation revenues were $57.7 million, up 4%. Legacy revenues were $12.7 million, down 15% while Equipment revenues were $1.5 million, up 100%. Quarterly adjusted operating profit was $22.47 million, flat year over year. Adjusted operating margin was 31.3% compared with 31.6% in the year-ago quarter.

Cash Dividend Payment

Rogers Communications' efforts to reward its shareholders with quarterly cash dividends were impressive. The board of directors declared a quarterly dividend of 48 cents per share on each of its outstanding Class B non-Voting shares and Class A Voting shares. The dividend will be paid on Apr 3, 2017 to shareholders of record on Mar 13, 2017.

Rogers Communication, Inc. Price, Consensus and EPS Surprise

Rogers Communication, Inc. Price, Consensus and EPS Surprise | Rogers Communication, Inc. Quote

2017 Outlook

Rogers Communications continues to project operating revenue growth in the range of 3-5%. Adjusted operating profit and free cash flow growth are estimated in the band of 2-4% on a year-over-year basis.

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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 Nasdaq, Inc.


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

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