TORONTO Rogers Communications Inc Chief Executive Guy Laurence is stepping down effective immediately, the Canadian telecom company said on Monday, an unexpected departure that came as it reported a sharp fall in quarterly profit.
Laurence, a former Vodafone UK executive brought in a little less than three years ago, will eventually be replaced by former Telus Corp chief Joe Natale.
Alan Horn will serve as interim CEO, the company said. It did not give a specific date when Natale will join the company. Telus said last year Natale would have an 18-month non-compete agreement from the end of 2015.
"The timing is never perfect with these things," Horn said on a conference call, focusing on the opportunity to secure Natale's services when asked to explain the CEO transition.
Rogers shares, which gained roughly 15 percent over Laurence's tenure, rose 1.8 percent to C$55.30.
Laurence was widely viewed as a turnaround expert when he was brought in by the company, controlled by Toronto's Rogers family.
The chief executive shied away from discounts to woo subscribers, instead focusing on improved product offerings and better customer service. The rate at which its wireless customers leave has dropped for the last four quarters.
"It's a strange situation," said Ryan Bushell, a portfolio manager with Leon Frazer and Associates, which has around 2.5 percent of its C$1 billion ($752 million) portfolio invested in Rogers.
"It would be very short-sighted to me if they were impatient with the turnaround he had in progress," he said.
But Bushell noted Laurence took steps to reshape the corporate culture that may have rankled some in the organization.
Laurence could not immediately be reached for comment.
Edward Rogers, the company's deputy chairman, thanked Laurence for "his competitive spirit and many contributions" in a statement.
RESULTS HIT BY SHOMI SHUTDOWN
In a earnings statement moved up from its scheduled Thursday release, Rogers said its net income fell to C$220 million ($166 million), or 43 Canadian cents per share, in the third quarter, from C$660 million, or 90 Canadian cents per share, a year earlier.
It recognized a C$140 million loss on shutting down the streaming television joint venture Shomi.
On an adjusted basis it earned 83 Canadian cents a year. Analysts had expected 88 cents per share according to Thomson Reuters I/B/E/S.
Laurence's severance payment was not included in the third quarter numbers, the company said.
($1 = 1.3290 Canadian dollars)
(With additional reporting by Anet Josline Pinto in Bengaluru; Editing by Chizu Nomiyama)