Rogers misses Q1 estimates as wireless, baseball take a toll
TORONTO -- Rogers Communications Inc. (RCIb.TO) and the wireless industry experienced an unusually slow first quarter, but the company is on track to meet its full-year estimates, chief executive Joe Natale said Thursday ahead of the company's annual meeting.
"Overall, we have confidence in our long-term growth plans, and remain on track to deliver on our healthy outlook for 2019." Natale told analysts in a conference call.
He said overall promotional activity was subdued in January and February, after a busy fourth quarter, and didn't begin to pickup until the last weeks of March. But, he said the second half of a year is usually a busier sales period.
"We continue to see robust growth opportunities. It may not be as high as Q4 (2018) . . . but still very healthy growth overall."
Earlier, the wireless, cable, internet and media company announced first-quarter profit and revenue that fell short of analyst estimates.
Its net income was $391 million or 76 cents per share for the quarter ended March 31. That compared with a profit of $425 million or 80 cents per share a year ago when Rogers, which owns the Toronto Blue Jays, received a special payment from Major League Baseball.
Revenue totalled nearly $3.59 billion, down from $3.63 billion in the same quarter last year.
The company attributed the revenue decline to lower sales of wireless equipment, such as smartphones, and lower revenue from its media division, which includes the Blue Jays baseball team.
Rogers said that, excluding baseball-related transactions last year and this year, its net income would have been up 10 per cent from last year and adjusted net income would have been stable.
In the wireless division, which accounted for $2.189 billion in revenue during the first quarter, Rogers reported 23,000 net additions to its post-paid services -- down from the year-earlier net addition of 95,000 postpaid subscribers.
However, churn -- a measure of customer retention -- improved to a company record 0.99 per cent from a year-earlier 1.08 per cent.
Additionally, average monthly revenue per user from both postpaid and prepaid subscribers improved to $54.13 from $53.68.
Natale told analysts that Rogers took "every opportunity to focus on price discipline" during the first quarter and "didn't do anything really aggressive" to stimulate its wireless subscribers market.
"There is a seasonality, more than ever, in the wireless business," he added. "In a lot of ways, we've trained the market to focus on key selling periods."
Growth of the subscriber base can be stimulated "but that comes at an economic price and, at the end of the day, we're trying to drive long-term shareholder value," Natale said.
"So we will weigh that against growth in customer additions, in the right time of the marketplace, and save our powder for those times of the year when we really can make a difference when there are great customer adds to be had."
On an adjusted basis, Rogers said it earned $405 million or 78 cents per share for the quarter, down from an adjusted profit of $477 million or 90 cents per share a year ago.
Analysts on average had expected a profit of 94 cents per share and revenue of $3.72 billion, according to Thomson Reuters Eikon.