Rogers Boosts 2022 Guidance Ahead of Decision on Shaw Deal

Randy Thanthong-Knight, Bloomberg News

Anthony Staffieri, chief financial officer of Rogers Communications Inc., listens during the Bloomberg Canadian Fixed Income Conference in New York, U.S., on Tuesday, Sept. 26, 2017. The conference offers an in-depth look at the market for Canadian bonds. , Bloomberg

(Bloomberg) -- Rogers Communications Inc. lifted its 2022 revenue forecast after announcing strong first-quarter results, saying it expects faster business growth from an economic rebound and rising immigration in Canada.

The country’s largest wireless and cable company earned C$462 million ($368 million) on an adjusted basis in the quarter ended March 31. That equals 91 Canadian cents per share, beating the average analyst estimate of 83 cents.

Toronto-based Rogers said it expects service revenue to increase 6% to 8% this year over 2021 levels; the previous guidance was 4% to 6%. It also raised its forecast for free cash flow and for adjusted earnings before interest, taxes, depreciation and amortization.

“We are very confident about the opportunities ahead, driven by the exceptional quality of our assets and the dedicated efforts of the Rogers team,” Chief Executive Officer Tony Staffieri said in a statement.

The company’s proposed acquisition of rival Shaw Communications Inc. is being reviewed by Canada’s antitrust agency and the federal government, with a divestiture of Shaw’s wireless division expected as part of the approval. The Globe and Mail newspaper reported Tuesday that Rogers wants to sell the division to Xplornet Communications Inc.

In March, the Canadian broadcast regulator approved Rogers’ purchase of Shaw’s cable television assets.

The deal, which the companies are trying to close this quarter, could boost the company’s wireless growth, allowing it to create compelling wireless, pay-television and internet bundles across a broader network footprint, according to John Butler, senior analyst at Bloomberg Intelligence.

Even in the absence of Shaw, Rogers’ wireless growth should improve as it executes better on driving transactions through its digital and retail channels, Butler said, adding that a rebound in travel could boost high-margin roaming fees this year.

FIRST WORD: Rogers Boosts FY Service Rev. Forecast: Snapshot

Key Numbers

Revenue was C$3.62 billion, in line with estimates and up 4% from 1Q last year
Service revenue was C$3.2 billion, up 6%
Cable revenue up 2%
Net income of C$392 million was up 9%
Postpaid mobile phone additions were 66,000
New guidance for annual free cash flow is C$1.9 billion to C$2.1 billion; previous guidance was C$1.8 billion to C$2 billion
New guidance on adjusted Ebitda is growth of 8% to 10% over last year; previous was 6% to 8%

Market Reaction