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TORONTO (Reuters) - Canada's Shaw Communications Inc (SJRb.TO) posted a sharp fall in quarterly profit on Thursday, mostly due to the cost of shutting down a video streaming joint venture, while its shares fell on worries about slower wireless growth.
Shaw said its wireless business - the former Wind Mobile that it acquired in early 2016 and rebranded as Freedom Mobile in November - added 14,307 net postpaid customers, a dip from about 27,000 in the prior quarter.
Brad Shaw, the company's chief executive, said the company had purposefully slowed down in wireless in the quarter as it prepared for the rebrand and builds out a network upgrade.
"We're not going to launch customers on the old network and have them come back a month later and say 'I'd like to have a new phone on the new network,'" he told reporters after the company's annual general meeting. He did, however, also acknowledging the tough competition of its biggest rival, Telus Corp (T.TO).
Calgary-based Shaw's core business of selling internet, telephone and television products came in broadly as expected as it focuses on building revamped products.
"The wireless piece is still up in the air but I feel encouraged that the parts of the business that have been around for a while are going in the right direction," said Dave Heger, an analyst at Edward Jones.
Shaw launched a renewed television product based on Comcast's X1 platform on Wednesday, which it hopes will help stem market share losses suffered at the hands of Telus' Optik TV.
It said it lost more than 13,000 consumer cable television accounts in the period and another 15,669 satellite accounts, while adding almost 17,000 consumer internet subscriptions.
Shaw's net income fell to C$89 million, or 18 Canadian cents per share, in the first quarter ended Nov. 30, from C$218 million, or 43 Canadian cents per share, a year earlier.
That included a C$107 million ($82 million) charge related to winding down Shaw and Rogers Communications Inc's (RCIb.TO) Netflix alternative Shomi last November.
Excluding items, the company's adjusted profit of 32 Canadian cents per share matched the average analysts' estimate, according to Thomson Reuters I/B/E/S.
Revenue rose 15 percent to C$1.31 billion.
Up to Wednesday's close, Shaw's shares had gained nearly 20 percent in the last 12 months. They were last down 1.7 percent on the day at C$27.71.
Reporting by Ahmed Farhatha in Bengaluru; Editing by Shounak Dasgupta and Dan Grebler