Rogers Communications profit slips on wireless costs, TV
TORONTO (Reuters) - Rogers Communications Inc spent heavily to get smartphones to its wireless customers and could not add enough Internet business to offset shrinkage of its television and landline phone business, contributing to a slip in earnings reported on Monday.
Canada's biggest wireless provider by subscribers, and a major cable and media company, Rogers posted a 2.75 percent drop in first-quarter profit, also hurt by restructuring costs and a wider loss in its media unit, but said it remains well-positioned to achieve its 2016 financial targets.
Executives for the Toronto-based company told analysts on a conference call that Rogers was willing to spend more to attract the high-value wireless customers it covets and had matched promotional pricing offered by both wireless and television rivals.
"There is an appetite to go after higher-value customers and pay the appropriate acquisition costs," said Guy Laurence, the company's chief executive.
In the quarter Rogers added 14,000 postpaid wireless subscribers, who typically use more expensive devices and pay more for service than prepay customers, while its wireless equipment costs rose 17 percent.
The company also signed up 16,000 landline Internet accounts, but lost 26,000 television subscribers and 10,000 landline phone accounts.
The company said it had net income of C$248 million, or 48 Canadian cents a share, in the three months to March 31, down from C$255 million, or 50 Canadian cents a share, a year earlier.
On an adjusted basis, it earned 51 Canadian cents a share, down from 53 Canadian cents a year ago. Revenue rose 2.2 percent to C$3.245 billion.
Analysts had on average expected Rogers to earn 53 Canadian cents a share on revenue of C$3.243 billion, according to Thomson Reuters I/B/E/S. Continued...