TORONTO Canada's Rogers Communications Inc (RCIb.TO) (RCI.N) on Tuesday reported a sharp rise in first-quarter profit and higher revenue as it boasted a surprisingly large jump in new wireless customers.
Rogers, the country's largest wireless company by market share, added 60,000 net postpaid wireless subscribers in the quarter, much more than the 34,000 additions that analysts at RBC Capital Markets had expected.
The Toronto-based cable, telecommunications and media company said its average wireless customer paid C$59.96 a month for service, up from C$58.54 a year ago.
The wireless performance was good news for incoming Chief Executive Joe Natale, who will join the family-controlled company at its annual meeting on Wednesday after Rogers secured his early release from contractual obligations with rival Telus Corp (T.TO).
Natale, a 12-year Telus veteran, was widely credited with leading its customer-service strategy, which helped the Vancouver-based company consistently have the lowest rate of churn - the rate at which customers dropped their services - in the Canadian wireless industry.
Rogers said it had net income of C$294 million ($220 million) or 57 Canadian cents per share for the three months to March 31, up from C$230 million or 44 Canadian cents per share, a year earlier.
"We believe strong Q1/17 results should meet what are rising expectations driven by better-than-expected wireless postpaid and Internet subscriber growth and renewed wireless EBITDA growth," RBC analyst Drew McReynolds wrote in a note, referring to earnings before interest, tax, depreciation and amortization.
Revenue rose 3 percent to C$3.34 billion, Rogers said, as wireless growth offset a fall in its media division and a flat performance from its cable unit.
Rogers added 30,000 landline internet and 2,000 landline phone accounts, but lost 24,000 television subscribers.
Rogers discarded its internal television product upgrade plans late last year, instead choosing to use Comcast's X1 platform in its battle for TV viewers against BCE Inc's (BCE.TO) Fibe TV. Rogers has said it will likely not get the X1 product to market this year.
On an adjusted basis, the company earned 64 Canadian cents a share. It kept its dividend payout steady at 48 cents.
Analysts had on average expected Rogers to earn 57 Canadian cents a share on revenue of C$3.365 billion, according to Thomson Reuters I/B/E/S.
Rogers in September said it would stop printing four of its biggest magazines this year and sell all its French-language and trade publications as more readers and advertisers move online.
(Additional reporting by John Benny in Bengaluru; Editing by Sai Sachin Ravikumar and Jonathan Oatis)