(Recasts with details on wireless. Adds share reaction, analyst
comment, CEO quote)
By Alastair Sharp
TORONTO, July 23 (Reuters) - Rogers Communications Inc
RCIb.TO added wireless customers in the second quarter after
two straight quarters of net defections, a key milestone in the
broad strategic overhaul the Canadian telecoms and media company
has embarked on.
Reporting quarterly financial results on Thursday, the
company said it added 24,000 net postpaid wireless subscribers,
who typically spend much more than those who prepay for service.
It also gained 8,000 prepay customers.
Under Chief Executive Officer Guy Laurence, who joined in
late 2013 with a reputation for shaking up corporate culture,
Rogers has shied away from offering customer discounts despite
sharp competition for subscribers.
"Subscriber metrics showed improvement and the steady
financials indicate that management's strategic decision to run
off low-profit historical retention plans appears to be the
right one," Desjardins analyst Maher Yaghi wrote in a note.
Rogers shares were 1.6 percent higher at C$44.52.
Net income dropped 10 percent, although adjusted operating
profit came in a touch above analysts' expectations.
Rogers' media division posted a sharp jump in profit and
revenue on the back of advertising connected to its first season
of broadcasting National Hockey League games. The unit
contributed 17 percent of total operating revenue, which rose 6
percent from a year earlier to C$3.4 billion ($2.6 billion).
In its fixed-line business, Rogers shed 32,000 cable-TV
subscribers and 11,000 landline telephone lines, but gained
4,000 Internet customers.
"Overall demand for content is going up, overall demand for
Internet is going up," Laurence told reporters on a conference
call. "(People) want to watch 'Breaking Bad' or 'Game of
Thrones'...that's what they want to spend their time doing, or
just discovering things on the Internet."
In a sign of the challenges facing television distributors,
HBO, the company behind the two shows Laurence mentioned, has
recently moved to sell its content directly to U.S. viewers.
ID:nL1N0WB1EQ
Rogers' net income was C$363 million, or 70 Canadian cents a
share, in the April-June quarter, down from C$405 million, or 79
cents a share, a year earlier.
On an adjusted basis, it earned 80 Canadian cents a share,
down from 84 cents. Analysts, on average, had expected an
adjusted 79 Canadian cents a share, according to Thomson Reuters
I/B/E/S.
Rogers upped its outlook for 2015 free cash flow by C$175
million due to tax-loss carry-forwards it gained in a
complicated deal to acquire struggling wireless operator
Mobilicity. ID:nL1N0ZA0WZ
It maintained other 2015 financial forecasts.
($1=$1.30 Canadian)
(Editing by Franklin Paul; and Peter Galloway)