Rogers reports disappointing fourth-quarter profit; stock sinks
By Alastair Sharp
TORONTO (Reuters) - Canada's Rogers Communications Inc (RCIb.TO: Quote) reported weaker-than-expected quarterly results on Wednesday, hurt by lower revenue at its cable television and landline phone businesses, and disappointed investors by not raising its dividend.
Shares of Canada's biggest wireless company slumped 6 percent to C$47.81 in Toronto.
Toronto-based Rogers said it added 31,000 net postpaid wireless subscribers, who typically spend much more than those who prepay - its second straight quarterly gain in customers with contracts after two quarters of net defections.
Guy Laurence, the chief executive officer, said the fourth quarter, which included the Christmas shopping period, was "the most fiercely competitive quarter, probably in the history of Canadian mobile, and in my view it's the new normal."
Revenue from Internet services, which Laurence called the "anchor of the home," rose 10 percent as customers migrated to more expensive higher-speed products.
But on a conference call, analysts who expected a dividend increase in the quarter, grilled executives. One noted that the cost of a 5 percent raise - roughly C$50 million ($35.51 million) - could have been funded through the sale of shares in Cogeco (CGO.TO: Quote), corporate buildings or cellular towers.
In July, sources told Reuters that Rogers was trying to sell the Shopping Channel, an asset thought to be worth more than C$300 million.
Chief Financial Officer Tony Staffieri and Laurence said on the conference call they want to meaningfully reduce debt before considering an increase in the payout, now 48 Canadian cents a share. Continued...