(Reuters) - Canada’s Rogers Communications Inc (RCIb.TO) reported a surprise jump in third-quarter profit on Thursday that sent its shares to a multi-year high, helped by impressive wireless customer growth and baseball success that boosted its media business.
Rogers owns the Toronto Blue Jays baseball team and the their home stadium, which has been packed this month for playoff games broadcast on Rogers’ TV channels.
Shares in the Toronto-based company jumped 2.9 percent to C$51.11 in early trade, their highest level since April 2013.
Rogers, which has the largest share of Canada’s wireless market, added 77,000 net postpaid wireless subscribers, who typically spend much more than those who prepay for service. It also gained 77,000 prepay customers.
“Wireless postpaid net additions were the positive surprise” while media gains accounted for much of the upside over financial expectations, RBC Capital Markets analyst Drew McReynolds wrote in a note.
Rogers had suffered two straight quarters of net wireless defections earlier in the year as CEO Guy Laurence moved away from offering discounts to maintain market share.
“Our results show we’ve got the right plan, we’re executing with discipline and we are delivering steady improvement. I expect this progress to continue,” Laurence said on a call with financial analysts.
Wireless profit was hit by the cost of subsidizing more smartphones, while churn - the percentage of customers leaving each month - was flat at a level much higher than rival Telus Corp (T.TO).
Laurence said churn was a lagging indicator and call center volumes were falling.
The cost of wireless equipment rose 27 percent, weighing on profit in the unit due to the higher costs incurred to subsidize more smartphones.
Rogers said net income rose to C$464 million ($353.8 million), or 90 Canadian cents per basic share, in the July-September quarter, from C$332 million, or 64 Canadian cents per basic share, a year earlier.
Operating revenue rose 4 percent to C$3.38 billion.
On an adjusted basis the company earned 92 Canadian cents a share.
Analysts had on average expected Rogers to earn 82 Canadian cents a share on revenue of C$3.32 billion, according to Thomson Reuters I/B/E/S.
In its fixed-line business, Rogers shed 31,000 cable-TV subscribers and 14,000 landline telephone lines, but gained 24,000 Internet customers.
The company said media revenue rose 8 percent on more advertising and subscribers at its Sportsnet channel and a rise in Blue Jays merchandise sales.
Additional reporting by Tanvi Mehta in Bengaluru; Editing by Don Sebastian, W Simon and Chizu Nomiyama