- Rogers Communications Inc. (TSX:RCI) faced a significant setback in its Q1 2024 performance, marked by a 50 per cent profit drop
- The telecommunications and media company’s financial report for the quarter revealed a net income of C$256 million, down sharply from C$511 million last year
- The notable decline was attributed to various factors, including higher depreciation and amortization expenses related to assets acquired through the company’s acquisition of Shaw Telecommunications
- Rogers Communications Inc. last traded at C$55.70 per share
Rogers Communications Inc. (TSX:RCI) faced a significant setback in its Q1 2024 performance, marked by a 50 per cent profit drop.
The telecommunications and media company’s financial report for the quarter ending March 31 revealed a net income of C$256 million ($0.46 a share), down sharply from C$511 million, or C$1.00 a share, recorded in the same period last year.
The notable decline was attributed to various factors, including higher depreciation and amortization expenses related to assets acquired through the company’s acquisition of Shaw Telecommunications. On top of this, increased financing costs also contributed to the diminished profitability.
Wireless service revenue exhibited a positive trend, increasing by 9 per cent during the quarter. This growth was primarily fueled by the expansion of Rogers’ mobile phone subscriber base and revenue derived from Shaw Mobile subscribers obtained through the Shaw transaction. Wireless equipment revenue also saw a 4 per cent increase, largely driven by a shift in the product mix towards higher-value devices.
Cable service revenue experienced a notable surge, skyrocketing by 94 per cent in the quarter, a direct outcome of the Shaw Transaction.
“At the one-year milestone of the Shaw merger, more Canadians continue to choose Rogers than any other carrier and we’re one year ahead of our synergy targets,” Rogers’ president and CEO, Tony Staffieri, said in a news release. “I am proud of our team and I remain confident in our future.”
The Canadian telecom giant surpassed Wall Street estimates for Q1 wireless subscriber additions, adding 98,000 net monthly bill-paying wireless phone subscribers. The company’s growth trajectory was further bolstered by the rising demand for its services, particularly among Canada’s growing population. The country’s increasing immigrant and temporary foreign worker population has fueled demand for telecommunication services, providing a favourable market environment for companies such as Rogers Communications.
Canada’s population hit a record high of 40.77 million in 2023, with an addition of 1.27 million people, marking the highest growth rate since 1957, as reported by Statistics Canada. This demographic expansion has played a significant role in driving the demand for telecom services in the country.
Adjusted earnings for the quarter stood at $0.99 a share, slightly exceeding FactSet analyst expectations of C$0.98 a share. However, total revenue fell short of projections, reaching C$4.90 billion as opposed to the anticipated C$4.92 billion. The revenue increase was primarily fueled by robust growth in cable and wireless businesses, driven by the contributions from the Shaw Communications acquisition.
Media revenue witnessed a decline of 5 per cent during the quarter, primarily attributed to lower subscriber revenue resulting from negotiations of certain content rates in the previous year.
Rogers Communications Inc. is a Canadian wireless, cable and media company that provides connectivity and entertainment.
Rogers Communications Inc. last traded at C$55.70 per share and has risen 0.36 per cent this week, but is down 6.96 per cent in a month.
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