Shaw Communications stumbles on cable cost- and cord- cutting

Thu Jun 26, 2014 5:53pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Shaw Communications Inc (SJRb.TO: Quote), a Western Canada-focused media and cable company, said on Thursday that net income fell almost 9 percent in the third quarter, as it lost more television subscribers despite a boost from business customers.

Calgary, Alberta-based Shaw is engaged in a fierce battle for customers with telecommunications operator Telus Corp (T.TO: Quote), but both have sought to avoid a price war.

Analysts cheered the cost-cutting of job cuts in its cable unit, which also shed viewers at a slower-than-expected pace and added net business accounts.

Shares of the family-controlled company closed up 0.2 percent at C$24.65 on the Toronto Stock Exchange.

"We were impressed by cable subscriber results and financials, but satellite, media and valuation are concerns," Dvai Ghose, an analyst at Canaccord Genuity, wrote in a note.

Shaw reported net income of C$228 million ($210 million), or 47 Canadian cents per share, for the quarter ended May 31, down from C$250 million, or 52 cents a share, a year earlier.

Operating revenue was C$1.342 billion, up slightly from a year ago. The company said it now expects free cash in excess of C$650 million for 2014.

Analysts, on average, expected Shaw to earn 49 Canadian cents a share on revenue of C$1.36 billion, according to Thomson Reuters I/B/E/S.   Continued...