* Cost controls, subscriber growth aid earnings
* Dividends increased at both companies
* Cogeco Inc Q4 EPS C$0.73 vs C$0.87 yr ago
* Cogeco Cable Q4 EPS C$0.81 vs C$0.92 yr ago
* Cogeco Cable shares up 1 pct
(Adds analyst quotes, details)
TORONTO, Oct 28 (Reuters) - Media and telecoms company Cogeco Inc CGO.TO and its Cogeco Cable CCA.TO unit posted lower earnings on Thursday but topped expectations on cost cuts and a strong performance by the Canadian cable operation.
The Montreal-based company also backed its revenue forecast for the coming year and raised its dividend .
Shares of the more closely watched cable division rose 2 percent after it reported subscriber growth in Canada and Portugal that exceeded expectations of Desjardins analyst Maher Yaghi.
“The Canadian operations continue to perform well yet remain valued at a discount to peers given the overhang from Portugal,” he wrote in a note to clients.
Yaghi said fourth quarter subscriber growth in both Canada and Portugal beat his expectations for basic cable, high-speed Internet and cable telephony.
In Portugal, Cogeco’s Cabovisao competes with state-owned Portugal Telecom and ZON Multimedia ZON.LS. Pricing wars there have squeezed earnings and profit margins.
Greg MacDonald, an analyst at National Bank Financial, said tight cost control helped overall earnings beat expectations and that the results “will give the market comfort that maturity in Canada is still a ways off and competition in Portugal has stabilized.”
For the June-August quarter, Cogeco Inc’s net income fell to C$12.3 million, or 73 Canadian cents a share, from C$14.6 million, or 87 Canadian cents, a year ago.
Revenue for the company, with a market value of about C$502 million, rose nearly 6 percent to C$333.7 million.
Analysts had on average expected a profit of 63 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Net income for the company’s cable arm dropped to C$39.7 million, or 81 Canadian cents a share, from C$44.7 million, or 92 Canadian cents a share, a year ago.
Analysts had expected 55 Canadian cents per share.
Revenue in the cable subsidiary also rose more than 5 percent to C$324.3 million.
Cogeco increased its quarterly dividend by 2 Canadian cents to 12 Canadian cents and the Cogeco Cable raised its dividend by 3 Canadian cents to 17 Canadian cents.
Shares of Cogeco Inc were 0.2 percent higher at C$33.33 in Thursday morning trade on the Toronto Stock Exchange, while shares of Cogeco Cable added 1.2 percent to C$39.45 on the same exchange.
Cogeco stuck to its 2011 guidance issued in July of revenue growth of 4.4 percent to C$1.38 billion. (Reporting by Alastair Sharp, additional reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Unnikrishnan Nair)