November 2, 2016 / 12:27 PM / a year ago

Shaw Communications profit misses estimates as costs rise

(Reuters) - Shaw Communications Inc SJRb.TO SJR.N reported a smaller-than-expected quarterly profit, largely due to costs associated with the launch of its low-priced internet service.

Brad Shaw, CEO of Shaw Communications, answers questions during a news conference at the Shaw AGM in Calgary, Alberta January 14, 2014. REUTERS/Todd Korol

The company, which has sharpened its focus on selling access to broadband data, rolled out its low-cost WideOpen Internet 150 service in July to over 90 percent of its customers.

Shaw has transformed itself into a pure-play communications company, purchasing the country’s fourth-largest wireless company Wind Mobile in late February and selling its media assets to Corus Entertainment Inc CJRb.TO.

The company said on Wednesday it expected slightly higher operating income in 2017.

The Calgary-based company forecast operating income before restructuring costs and amortization of C$2.13 billion-C$2.18 billion in 2017, higher than the C$2.11 billion this year.

Revenue rose 15.5 percent to C$1.31 billion ($980.3 million)in the fourth quarter ended Aug. 31, topping analysts’ average estimate of C$1.30 billion.

The company’s net income fell 44 percent to C$154 million, or 31 Canadian cents per share.

Shaw recorded a C$158 million gain on the sale of wireless spectrum in the year-ago quarter.

The company earned 29 Canadian cents from continuing operations in the latest quarter, compared with the average analyst estimate of 32 Canadian cents, according to Thomson Reuters I/B/E/S.

Operating, general and administrative expenses rose to C$757 million from C$606 million.

($1 = 1.3363 Canadian dollars)

Reporting by Ismail Shakil and Vishaka George in Bengaluru and Alastair Sharp; Editing by Maju Samuel and Sriraj Kalluvila

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