July 28, 2009 / 11:27 AM / in 8 years

UPDATE 5-Rogers Comms profit up, but revenue outlook cut

* Rogers Q2 EPS C$0.59 vs C$0.47

* Sees wireless user spending down

* Cuts 2009 revenue growth forecast

* Activates 315,000 smartphones in quarter

* Shares fall 5.5 percent (Adds CEO comments, details)

By Wojtek Dabrowski

TORONTO, July 28 (Reuters) - Rogers Communications Inc RCIb.TO slashed its full-year revenue outlook on Tuesday and said its wireless subscribers were cutting back on spending due to the recession, sending its shares down 5.5 percent.

The owner of Rogers Wireless, Canada’s biggest wireless carrier, said it is clamping down on costs to help it cope with the recession and that there is no sign of an economic rebound yet.

The company said it earned C$374 million ($346.3 million), or 59 Canadian cents a share, in the second quarter ended June 30. That was up from a profit of C$301 million, or 47 Canadian cents a share, a year earlier.

However, it lowered its 2009 consolidated revenue outlook, citing “greater and more prolonged than forecast media advertising revenue declines associated with the sustained recessionary economic environment”.

Rogers now sees 2009 revenue growth of 2 percent to 4 percent, down from its previous forecast of 5 percent to 9 percent.

The company’s stock dropped C$1.70 to C$29.28 on the Toronto Stock Exchange on Tuesday morning.

“We don’t see anything today that would say that we’re in the cusp of a recovery or that we can see daylight going forward,” Chief Executive Nadir Mohamed told reporters.

“I wish I could be more optimistic.”

Earlier, he told analysts he is “encouraged” by recent Bank of Canada comments predicting signs of economic growth later this year or early in 2010.

The company added 148,000 new postpaid, or longer-term, wireless subscribers in the quarter, compared with 92,000 additions a year earlier.

Troy Crandall, an analyst at MacDougall, MacDougall & MacTier, said Rogers’ overall results were “mixed,” but he was impressed by the company’s ability to attract new wireless users.

“They’re doing a great job of adding customers, but you can tell that their current customers are obviously feeling the pinch,” he said. “People are becoming a bit more frugal.”

Rogers activated 315,000 smartphones in the second quarter. These were mostly Apple Inc’s AAPL.O popular iPhone 3G, as well as Research In Motion Ltd’s RIM.TORIMM.O BlackBerry and Google Inc’s GOOG.O Android-based devices.

About one-half of these were new users, with the rest being upgrades.

Rogers said blended average monthly revenue per wireless user fell to C$63.09 from C$64.56, “which reflects the impact of declines in roaming and out-of-plan usage revenues as customers curtail travel and adjust their wireless usage during the economic recession”.

Toronto-based Rogers said overall revenue rose about 3 percent to C$2.89 billion from C$2.80 billion in the quarter.

It said it sees the impact of the weak economy across a number of its businesses, which has translated into weaker subscriber growth.

“Basic cable, digital cable, Internet, and home phone service subscriber growth all continued to slow from the previous year reflecting the worsening economic recession and unemployment levels in (the province of) Ontario,” it said in a statement.

In a separate announcement on Tuesday, Rogers said it has teamed up with Manitoba Telecom Services MBT.TO to build a regional high-speed wireless network. Rogers also said it has begun ramping up the speed of its own wireless network.

$1=$1.08 Canadian Reporting by Wojtek Dabrowski; editing by Peter Galloway

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