February 18, 2009 / 12:39 PM / in 9 years

UPDATE 4-Rogers swings to loss on TV charges, shares drop

*Q4 share loss C$0.22 vs profit C$0.40

*Revenue rises 9 pct to C$2.94 bln

*Sees 2009 revenue growth of 5 to 9 pct

*Stock drops more than 8 pct shortly after open (Adds analysts’ comments, stock price)

By Wojtek Dabrowski

TORONTO, Feb 18 (Reuters) - Rogers Communications Inc RCIb.TO, which owns Canada’s biggest wireless carrier, posted a quarterly loss on Wednesday as it took almost C$300 million ($238 million) in impairment charges at its television channels to reflect the impact of the weak economy on advertising revenue.

The company’s shares fell more than 8 percent in wake of the earnings report. However, National Bank Financial analyst Greg MacDonald said this was a result of investor disappointment over demand for such Rogers mobile-phone data services as text messaging and Internet browsing.

“Wireless data is not showing the same type of growth the market wants to see,” he said. “That’s it, flat out.”

Rogers said it activated more than 400,000 smartphones in the quarter, including Apple’s AAPL.O iPhone 3G and Research In Motion’s RIM.TORIMM.O BlackBerry.

And it said postpaid average revenue per wireless user rose 2 percent to C$74.71, driven in part by 36 percent growth in data revenue.

However, that growth was not enough for some investors after earlier Rogers’ growth levels of more than 40 percent. Analysts have noted the weak economy is prompting some subscribers to scale back their spending on flashy mobile phones and more expensive data plans.

“It’s not a massive retrenchment, but it is more of a flattening of demand,” independent technology analyst Carmi Levy said of current spending habits in the wireless market.

“I think this is virtually entirely due to the recession,” he said. “Until the economy turned down, the wireless sector was as hot as hot could be.”

Rogers’ loss totaled C$138 million ($109.5 million), or 22 Canadian cents a share, in the fourth quarter, ended Dec. 31. A year earlier, it posted a profit of C$254 million, or 40 Canadian cents a share.

Investors dumped the company’s stock, sending it 8.4 percent lower to C$31.45 on the Toronto Stock Exchange.

The results included a C$294 million noncash impairment charge against the goodwill, broadcast licenses and other assets related to its conventional TV channels.

The losses were mostly related to the “weakening of industry expectations and declines in advertising revenues amidst the slowing economy,” Toronto-based Rogers said.

Still, it increased its dividend to C$1.16 a year from C$1.00, effective immediately.

Operating revenue surged 9 percent to C$2.94 billion in the quarter, as the wireless division added 158,000 new postpaid, or longer-term, subscribers. This was flat from the same period last year.

Rob Bruce, president of the wireless business, told analysts in a conference call that subscribers appear to be “paring back” on some mobile phone services.

Postpaid monthly churn, or customer turnover, dropped to 1.12 percent in the quarter from 1.17 percent a year earlier.

Alan Horn, Rogers’ acting chief executive, told analysts the company will shift “an increasing amount of management attention” to clamping down on operating expenses and capital expenditures, adding: “we believe ... that we have significant opportunities in this area.”

High-speed Internet additions plunged to 19,000, down from 46,000 a year ago. The company blamed the economy, and said the results reflect growing market penetration.

For 2009, Rogers expects its total revenue to rise by 5 percent to 9 percent. It booked C$11.34 billion in revenue in 2008.

Ted Rogers, the company’s founder and CEO, died late last year at the age of 75. The company said Horn, its chairman, continues to serve as acting CEO while the company searches for a permanent replacement.

“This is the top priority of the board,” Horn said.

Rogers is fighting with BCE Inc BCE.TO and Telus T.TO for dominance of the country’s wireless market. Even as the economy slows, the competition promises to get more fierce. New entrants who won wireless spectrum in a government auction last year have promised to introduce service in the coming months.

$1=$1.26 Canadian Editing by Peter Galloway

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