Wireless gains boost profit at Quebecor's Videotron
(Reuters) - Videotron, the phone, cable-TV and Internet services division of Canadian media company Quebecor Inc, posted solid revenue growth and a jump in quarterly profit on Wednesday, mostly due to mobile-phone growth and one-off financial gains.
Profit jumped almost 69 percent to C$161.9 million ($164.4 million)in the fourth quarter on a 7 percent rise in revenue, and Quebecor's shares were up by 12 Canadian cents at C$35.85 early on Wednesday afternoon.
Videotron, focused on the French-speaking province of Quebec, added 32,500 wireless subscribers in the fourth quarter, ended December 31. That was less than in both the previous quarter and the year-before quarter, and lower than expected by RBC Capital Markets analyst Drew McReynolds.
McReynolds pointed to a drop in the average Videotron wireless bill, to C$41.67 a month from C$48.65 a year earlier, and suggested the decline had more to do with the absence of an iPhone offering in Videotron's lineup than with tougher competition.
"While the results of other wireless operators pointed to a highly competitive quarter, we suspect wireless subscriber growth for Videotron was impacted by the absence of the iPhone in a refresh period," he said.
Still, Videotron's revenue from mobile phone services more than doubled to C$34.3 million in the quarter.
Videotron launched its wireless service in late 2010 and boasts 290,600 customers. In the Canadian market, wireless is seen as the fourth leg of a bundled package of landline telephone, Internet and television services, with providers offering discounts to encourage customers to sign up for the whole package.
Videotron added 26,000 Internet customers, 17,300 TV customers, and 25,900 landline telephone customers in the quarter.
Much of the jump in profit was attributed to a gain on the value of financial instruments compared with a year earlier, while the company said the roll-out of its wireless network had added to its operating costs.
The Montreal-based Quebecor parent company is due to release its full financial results on March 15.
(Reporting by Alastair Sharp in Toronto; editing by Rob Wilson and Peter Galloway)
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