UPDATE 1-Shaw Communications profit drops on streaming startup costs
(Adds analyst comments, background and details)
By Alastair Sharp
TORONTO Jan 14 (Reuters) - Canadian cable-TV operator Shaw Communications Inc reported a 7 percent drop in quarterly profit on Wednesday, hurt by a fall in video subscriptions and the costs of launching its new video streaming service.
Cable providers have struggled to respond to the popularity of cheaper online-only rivals such as Netflix, and Shaw said it lost C$13 million ($11 million) on the startup of its subscription video-on-demand service, called shomi, a joint venture with Rogers Communications.
It also pointed to higher amortization costs as contributing to the profit drop.
Shaw's shares fell 2.1 percent to C$30.56 in early trade on the Toronto Stock Exchange.
The Calgary-based company's net income fell to C$227 million, or 46 Canadian cents per share, in its first quarter, ended Nov. 30, from C$245 million, or 51 Canadian cents a share, a year earlier.
Revenue rose 2 percent to C$1.39 billion.
Analysts, on average, had expected Shaw to earn 51 Canadian cents a share on revenue of C$1.42 billion, according to Thomson Reuters I/B/E/S. Continued...