Shaw Communications Inc. SJR reported robust financial numbers for the third quarter of 2015 wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share in the reported quarter stood at 45 cents, beating the Zacks Consensus Estimate of 38 cents. However, the company’s earnings declined 2.3% year over year. GAAP net income from continuing operations was nearly $168.8 million, down 8.3% year over year.
On the other hand, total revenue in the quarter rose 5.7% year over year to approximately $1,140 million, beating the Zacks Consensus Estimate of $1,133 million.
Quarterly operating income before amortization was around $519.2 million, up 7% from the year-ago quarter. Quarterly operating margin stood at 45.3% against 44.8% in the third quarter of fiscal 2014. In the third quarter, Shaw Communications generated around $403.8 million of cash from operations, up 27.2% year over year. Free cash flow totaled $206.7 million, up 6.7% year over year.
At the end of the third quarter of fiscal 2015, Shaw Communications had cash and marketable securities of $227.7 million, down 55.7% and outstanding debt of $4,045.6 million, up 6.8% from the fourth quarter of fiscal 2014, respectively. The debt-to-capitalization ratio stood at 0.50 compared with 0.48 at the end of Aug 31, 2014.
Subscriber Statistics
As of May 31, 2015, the video cable customer base totaled 1,881,547 reflecting a net reduction of 24,524 customers in the quarter. Video satellite customers decreased 2,820 to 851,569. Meanwhile, with the addition of 7,212 customers in the reported quarter, the company's Internet customer base now stands at 1,949,842. Digital phone lines grossed 1,341,734, reflecting a year-over-year reduction of 20,974 lines.
Consumer Segment
Quarterly revenues reached $767.1 million, up 0.5% year over year. Quarterly operating income before amortization came in at $353.7 million, up 2.6% year over year.
Business Network Services Segment
This segment was created after the acquisition of ViaWest. Quarterly total revenue from the division stood at $105.5 million. Meanwhile, the segment’s quarterly operating income before amortization was $50.9 million.
Business Infrastructure Services Segment
Quarterly total revenue stood at $50.9 million while operating income before amortization was $20.2 million.
Media Segment
Quarterly total revenue came in at $244.7 million, up 0.7% year over year. Operating income before amortization was $94.5 million, up 2.6% year over year.
Financial Outlook
For fiscal 2015, management expects both total revenue and operating income before amortization to grow 5–7% on a year-over–year basis. Free cash flow is projected to exceed $650 million.
Zacks Rank & Peers
Shaw Communications, which currently has a Zacks Rank #3 (Hold), competes with Canadian telecom and cable multi-service operators such as Rogers Communications Inc. RCI, Telus Corp. TU and BCE Inc. BCE.
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