(Bloomberg) — Rogers Communications Inc. reported fourth-quarter profit that was broadly in line with analysts’ expectations and said it believes it can close a $16 billion takeover of Shaw Communications Inc. in the first half of the year.
Canada’s largest cable and wireless company said it earned 96 Canadian cents a share on an adjusted basis, down 3% from the previous year. That compared with an average analyst forecast of 95 cents.
Revenue in the quarter was C$3.92 billion ($3.1 billion), slightly higher than estimates of C$3.84 billion. Sales got a 26% boost in Rogers’s sports and media division because the professional hockey and basketball seasons started on time, unlike in 2020. But the unit lost money.
It’s the company’s first earnings report under Chief Executive Officer Tony Staffieri. He was fired as the company’s chief financial officer last September after he participated in a plot to oust CEO Joe Natale.
That was part of a wild series of events that included Chairman Edward Rogers suing the company founded by his late father and battling with his sisters and mother for control of the board. He won a court decision in early November, allowing him to push out five directors.
The board then voted to dump Natale and bring Staffieri back in the top executive post, over the objections of other members of the Rogers family.
The company said it incurred about C$62 million in costs related to the Shaw deal, including fees for lining up a credit facility, and another C$39 million in other restructuring expenses that were “primarily severance costs.”
Key Insights
- The company said it added 141,000 phones and 130,000 net postpaid subscribers during the quarter. Bloomberg Intelligence analyst John Butler had expected 140,000; Wall Street expectations were for about 138,000.
- Revenue and adjusted Ebitda in wireless were both up 5% compared with 4Q of 2020
- Revenue and adjusted Ebitda in the cable unit were flat compared with the previous year
- The company released guidance calling for adjusted Ebitda to grow 6% to 8% above last year’s level of C$5.89 billion.
- Free cash flow for 2022 is expected to be C$1.8 billion to C$2 billion. Last year it was C$1.67 billion.
Market Reaction
- Rogers shares are up 2.6% YTD versus a 3% decline for the S&P/TSX Composite Index. Last year they gained 1.6% versus a 21.7% gain for the index.
- Conference call is at 8 a.m. New York time. Click here for access.
(Updates with restructuring and severance costs and other changes)
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