TORONTO – Despite an uptick in revenue, Rogers Communications saw its second quarter profits fall 10% amidst on-going losses of cable and home-phone customers.
Rogers said Thursday that operating revenue for the period ended June 30, 2015 totalled $3.40 billion, up 6% from $3.21 billion year-over-year, while net income was $363 million, down from $405 million. On an adjusted basis, net income fell to $412 million from $432 million in the second quarter of 2014.
Consolidated revenue increased 6% this quarter, reflecting revenue growth of 6% in Wireless and 23% in Media, though was virtually flat in its Cable and Business Solutions divisions. Wireless revenue increased as a result of greater smartphone sales, higher network revenue from the continued growth in data use by its subscriber base, as well as the adoption of higher ARPU and ARPA generating Rogers Share Everything plans. Cable revenue was stable as continued Internet revenue growth was offset by modest revenue declines in Television and Phone, while Media revenue increased as a result of the NHL licensing agreement together with growth at Sportsnet, the Toronto Blue Jays, and Next Issue Canada, partially offset by continued softness in conventional broadcast TV and print advertising.
"We grew both the top and adjusted operating profit lines in the quarter while showing improvement in our Wireless and Internet subscriber metrics," said president and CEO Guy Laurence, in the earnings’ news release. "In addition, we completed a series of strategic transactions to further enhance our spectrum position, delivered a successful first year of our exclusive national NHL rights agreement, and continued to implement key customer experience improvements. Our Rogers 3.0 plan continues to gain traction, our financials are trending in the right direction, and we're entering the back half of the year with key regulatory decisions behind us."
Rogers activated approximately 682,000 wireless smartphones this quarter, of which 33% were new subscribers, with higher-value smartphone customers representing 83% of Wireless postpaid subscribers as at June 30, 2015, reads the press release.
When asked about plans for newly acquired Mobilicity, Laurence said that it is business as usual and that he was “very encouraged” after a recent meeting with that providers’ management team.
“We haven’t decided what the future of the brand will be”, he told reporters on a call Thursday morning. “We’ve obviously kept the management team, they’ve got a good team there, and they’ve now got the oxygen of cash in order to conduct the business.”
The company added 24,000 new wireless postpaid customers in the quarter (to sit at 8.16 million) and 8,000 prepaid customers (for a total of 1.35 million). On the TV side, Rogers lost 32,000 customers to fall just under two million customers at 1.95 million. It added 4,000 internet customers to sit at 2 million broadband subs and lost 11,000 home phone customers and now has 1.12million of those households.
