TORONTO (Reuters) - Canada’s Rogers Communications Inc (RCIb.TO) reported weaker-than-expected quarterly results on Wednesday, hurt by lower revenue at its cable television and landline phone businesses, and disappointed investors by not raising its dividend.
Shares of Canada’s biggest wireless company slumped 6 percent to C$47.81 in Toronto.
Toronto-based Rogers said it added 31,000 net postpaid wireless subscribers, who typically spend much more than those who prepay - its second straight quarterly gain in customers with contracts after two quarters of net defections.
Guy Laurence, the chief executive officer, said the fourth quarter, which included the Christmas shopping period, was “the most fiercely competitive quarter, probably in the history of Canadian mobile, and in my view it’s the new normal.”
Revenue from Internet services, which Laurence called the “anchor of the home,” rose 10 percent as customers migrated to more expensive higher-speed products.
But on a conference call, analysts who expected a dividend increase in the quarter, grilled executives. One noted that the cost of a 5 percent raise - roughly C$50 million ($35.51 million) - could have been funded through the sale of shares in Cogeco (CGO.TO), corporate buildings or cellular towers.
In July, sources told Reuters that Rogers was trying to sell the Shopping Channel, an asset thought to be worth more than C$300 million.
Chief Financial Officer Tony Staffieri and Laurence said on the conference call they want to meaningfully reduce debt before considering an increase in the payout, now 48 Canadian cents a share.
Rogers, which earlier this week cut 200 jobs in its margin-squeezed media unit, said it expects revenue and profit to rise 1 percent to 3 percent in 2016.
In the quarter, the average wireless customer paid C$59.16 a month for service, down 70 Canadian cents from a year ago.
But the expansion of the company’s shared-data plans boosted the average bill for those accounts, which can include wireless devices for several family members.
Rogers lost 24,000 cable-TV and 15,000 landline telephone line subscribers, but gained 16,000 Internet customers.
Net income edged up to C$299 million, or 58 Canadian cents per share, from C$297 million, or 58 Canadian cents, a year earlier.
Operating revenue rose 2.6 percent to C$3.45 billion, just below expectations.
On an adjusted basis it earned 64 Canadian cents a share, compared with 69 cents a year earlier. The average analyst estimate was 70 cents, according to Thomson Reuters I/B/E/S.
Editing by Jeffrey Benkoe