Rogers Communications Inc. (RCI) declared its first-quarter 2013 financial results, where both the top and the bottom lines missed the Zacks Consensus Estimate.
Quarterly net income was $410.8 million or 79 cents per share compared with a net income of $357.2 million or 68 cents per share in the year-ago quarter. The first-quarter adjusted EPS was 78 cents, missing the Zacks Consensus Estimate by a penny. Quarterly total revenue was $3,003.7 million, up 3% year over year, but below the Zacks Consensus Estimate of $3,024 million.
First-quarter operating profit was $1,169.9 million, up 8% year over year. Quarterly operating margin was 38.9% compared with 37.2% in the year-ago quarter.
During the first quarter of 2013, Rogers Communications generated $798.8 million of cash from operations compared with $523.9 million in the year-ago quarter. Free cash flow during the reported quarter was a negative $338.4 million compared with $78.4 million in the year-ago quarter.
At the end of first quarter fiscal 2013, Rogers Communications had $1,423 million of cash and marketable securities on its balance sheet as compared with $211.4 million at the end of fiscal 2012. Total outstanding debt, at the end of the reported quarter, was $10,328.9 million compared with $10,360.6 million at the end of fiscal 2012. At the end of the reported period, the debt-to-capitalization ratio was 0.72 compared with 0.74 at the end of fiscal 2012.
Wireless Segment
Quarterly total revenue was $1,746.4 million, up 3% year over year. Network revenue was $1,670 million, up 4% year over year. Equipment sales were $76.4 million, down 18% year over year.
Quarterly adjusted operating profit for the entire segment was $759.1 million, up 4% year over year. Adjusted operating margin was 43.5% in the first quarter of 2013 compared with 43.2% in the year-ago quarter. In the same time frame, Wireless Data revenue was $756.1 million, up 22% year over year. Wireless Data revenue represented around 45% of total wireless network revenue compared with 39% in the prior-year quarter.
During the first quarter of 2013, the Wireless segment activated record 673,000 smartphones, up 4.8% year over year. Most of these smartphones are either iPhone of Apple Inc. (AAPL), Blackberry of Blackberry Ltd. (BBRY) or Google Inc. (GOOG) developed Android-based handsets. Quarterly consolidated ARPU (average revenue per user) was $59.2, up 2% year over year.
During the reported quarter, Postpaid retail subscribers’ base was around 7.878 million, up 3.4% year over year. Smartphone customers now constituted a record 71% of the overall postpaid subscribers compared with 60% in the year-ago quarter. Quarterly Postpaid ARPU was $68, up 1.2% year over year. Monthly churn rate was 1.2% compared with 1.3% in the prior-year quarter.
Prepaid subscribers’ base was around 1.498 million, down 11.3% year over year. Quarterly Prepaid ARPU was $14.5, down 0.4% year over year. Monthly churn rate was 4.5% compared with 4.3% in the prior-year quarter.
Cable Segment
Quarterly total revenue was $854.4 million, up 4% year over year. Basic cable operations revenue was $454.5 million, down 2% year over year. Internet revenue was $274.9 million, up 15% year over year. Home Telephony revenue was $122.1 million, up 6% year over year. Quarterly adjusted operating profit for the whole segment was $425.7 million, up 13% year over year. Adjusted operating margin was 49.8% in the reported quarter compared with 45.8% in the year-ago quarter.
At the end of first-quarter fiscal 2013, Cable TV subscribers’ base was around 3.828 million, up 1.7% year over year. High-speed Internet subscribers’ base was 1.89 million, up 4.4% year over year. Digital cable subscriber base now constituted 81% of the overall total television subscriber base compared with 78% in the year-ago quarter.
Media Segment
Quarterly total revenue was $338.4 million, down 4% year over year. Quarterly adjusted operating loss was $6.9 million, down 50% year over year.
RBS Segment
Quarterly total revenue was $92.3 million, up 7% year over year. Quarterly adjusted operating profit was $22.8 million, up 28% year over year.
Currently, Rogers Communications has a Zacks Rank #3 (Hold).
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