Quebecor Inc.'s CEO blamed the failure of the Montreal Canadiens to make the playoffs for a major hit to its media ad revenues, a "disappointing" dent in a quarter that nonetheless saw the company skate to $1.04 billion in overall revenue.
The Montreal-based communications giant's second-quarter revenue edged up 0.50 per cent from the same time last year, largely due to growth at its telecommunications arm as revenue at its media arm fell six per cent.
"The results of our media operations were heavily impacted by TVA Sports, which...suffered from the absence of the Montreal Canadiens in the NHL playoffs," Pierre Karl Peladeau said on a conference call with investors Thursday.
Revenue from the sports and entertainment division was relatively unchanged at $36.9 million.
With playoffs spanning the bulk of the quarter, advertising revenue from the TVA Sports specialty channel plunged 36 per cent from the year-earlier period, when the 101-year-old team made the first playoff round, said TVA Group president and CEO France Lauziere.
Growth at Quebecor's Videotron cable, internet and wireless business boosted revenue from telecommunications to $847.2 million, up from $826.6 million last year.
Quebecor had $41.3 million of net income attributable to shareholders in the second quarter, amounting to 18 cents per share.
That was down from $137.8 million or 57 cents per share in the second quarter of 2017, when Quebecor's profit was boosted by a gain from the sale of a spectrum licence.
Adjusted income from continuing operating activities, which excludes the spectrum sale and other items, was $106.2 million or 45 cents per share, up from $88.6 million or 37 cents per share the year prior.
Peladeau said the company achieved a major milestone in the second quarter when it became 100-per-cent owner of Quebecor Media, after buying out its strategic partner -- the Caisse de depot.
"With access to all the cash flows generated by the subsidiary, the corporation will now be better equipped to seize business opportunities as they arise, to achieve its objectives with respect to its dividend payment policy, and to take full control of its development projects," Peladeau said Thursday in a statement.
Strong telecommunications sales yielded revenues that slightly exceeded analyst expectations in a "seasonally weaker quarter," said RBC Dominion Securities Inc. analyst Drew McReynolds.
Roughly 32,000 net new wireless subscribers outweighed a drop in television subscriptions -- a decrease typical of the lead-up to Quebec's traditional moving season, which sees most leases expire July 1, said Videotron president and CEO Manon Brouillette.
Quebecor's stock price jumped more than five per cent Thursday, ending the trading session at $28.40, its highest closing price in at least ten years.
Peladeau said in a Facebook post earlier this week that Quebecor's ability to do business with the Quebec government was jeopardized because he had pleaded guilty on July 10 to violating the province's election act by personally reimbursing a $137,000 debt accumulated by his campaign to become leader of the Parti Quebecois.
He said the province's treasury board and premier have the power to declare an exception to the act's automatic penalties and a Quebecor statement on Tuesday said it was confident that the matter "will be settled in the near future without restricting the corporation's activities or its public sector clients."