January 13, 2011 / 6:02 PM / in 7 years

UPDATE 2-Shaw Comms delays wireless, books Canwest buy

* Q1 EPS C$0.04 vs C$0.26 year ago, analyst forecast C$0.35

* Revenue up 19 pct at C$1.08 bln, beats Street

* Delays wireless launch to early 2012

* Raises dividend by 5 pct (Adds executive quote, details on wireless delay)

TORONTO, Jan 13 (Reuters) - Shaw Communications Inc (SJRb.TO) posted net income sharply below analyst expectations on Thursday as it booked costs for its purchase of Canwest assets and said it was delaying the launch of its wireless network until early 2012.

Shaw, which closed a C$2 billion ($2.02 billion) deal for the television assets of Canwest Global Communications in October, which created a Shaw Media division, posted a net profit of C$20 million, or 4 Canadian cents a share, on revenue of C$1.08 billion.

Analysts had, on average, expected earnings of 35 Canadian cents per share on revenue of C$1.06 billion, according to Thomson Reuters I/B/E/S.

Shaw had a profit of 26 Canadian cents a share a year ago on revenue of C$905.6 million.

One-off costs relating to the Canwest acquisition totaled C$198 million in the quarter to Nov. 30. The company said its net income excluding the non-operating items would have been C$159 million, compared with C$180 million a year ago.

Shaw said its cable division added customers and hiked rates, leading to a 7 percent increase in revenue to C$758 million. Its satellite division revenue grew 3 percent to C$206 million.

The newly formed media division brought in C$125 million between Oct. 27 and Nov. 30, the company said.

Brad Shaw, who was rushed in to replace his brother Jim as chief executive in November, hinted that the three-month delay in launching its wireless operation, and further investment of between C$150 million and C$200 million, may be due to an network upgrade.

“With the rapid evolution of wireless technology and changing market conditions, we believe it is best to take a disciplined approach to our wireless rollout to ensure we deliver an exceptional customer experience,” he said.

An official said last week that the company’s wireless chief, Laurence Cooke, had left abruptly after being brought in in June. [ID:nN07201282] The company did not confirm he had left nor name a replacement.

The Western Canadian-focused company bought wireless spectrum in a 2008 government auction, but has been sluggish compared with other buyers such as new entrants Mobilicity and Wind Mobile, which are already present in most major Canadian cities.

However, Shaw and Quebecor’s (QBRa.TO) Videotron unit, which launched in Quebec in September, are seen as more formidable threats to the dominance of BCE’s (BCE.TO) Bell Canada unit, Rogers Communications (RCIb.TO) and Telus (T.TO), as they can package mobile offerings with their existing cable, home-phone and Internet services. [ID:nN09185742]

Those three, which account for around 95 percent of Canada’s wireless market, are each testing a high-speed upgrade to their current networks.

The Calgary-based company also raised its dividend on Thursday by 5 percent.

Shaw said it would pay an annual dividend of 92 Canadian cents on its class B non-voting shares and 91.75 Canadian cents on its class A SJRa.TO shares from March 30. (Reporting by Alastair Sharp, additional reporting by Abhiram Nandakumar in Bangalore; editing by Rob Wilson)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below