Shaw Communications Q1 Profit Tops View, Revenues Match; Backs 2014 Outlook

(RTTNews) - Diversified Canadian communications company Shaw Communications, Inc. (SJR ,SJR.B.TO) reported Tuesday a profit for the first quarter of fiscal 2014 that grew from last year, reflecting lower interest expenses and improved revenues. Earnings per share topped analysts' expectations, while quarterly revenues met their estimates. The company also backed its revenue growth guidance for the full-year 2014.

Additionally, the company also noted that its board of directors are meeting later in the day and will be considering a dividend increase.

"I'm pleased to report solid first quarter results. Our performance was driven by growth in our commercial business, discipline around customer acquisition, and strength in our Internet business. We are continuing to make investments in the customer experience, brand, and residential and commercial infrastructure," CEO Brad Shaw said.

The Calgary, Canada-based company reported net income attributable to equity shareholders of C$236 million or C$0.51 per share for the first quarter, higher than C$224 million or C$0.49 per share in the prior-year quarter.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of C$0.49 per share for the quarter. Analysts' estimates typically exclude special items.

Consolidated revenue for the quarter increased 3.3 percent to C$1.36 billion from C$1.32 billion in the same quarter last year, and matched eight Wall Street analysts' consensus estimate of C$1.36 billion.

Revenues for the cable division for the quarter increased 4.3 percent to C$844 million, driven by rate increases and lower promotional activity. Satellite division revenues grew 1.9 percent to C$218 million from last year, primarily due to rate increases.

Quarterly revenue for the media division was C$325 million, up 1.9 percent from last year, due to improved subscriber revenues and lower advertising and promotion costs.

Total operating income before amortization for the quarter increased 1.2 percent to C$608 million from the year-ago quarter, while operating margin contracted 100 basis points to 44.6 percent from last year.

Funds flow from operations surged to C$382 million from C$127 million in the year-ago quarter.

During the quarter, video subscribers decreased 29,619 or 1.5 percent to 2.01 million. Internet lines grew 2,746 or 0.1 percent to 1.89 million, and digital phone lines increased only 1,351 or 0.1 percent to 1.36 million. Meanwhile, DTH customers decreased 9,323 or 1.0 percent to 0.89 million.

Looking ahead to fiscal 2014, the company continues to anticipate 2 to 4 percent growth in consolidated revenue and operating income before amortization, after adjusting for the net impact of fiscal 2013 acquisition and disposition activity.

The company also still expects free cash flow be in the range of C$625 million to C$650 million. Further, it still expects a marginal decline in capital investment, excluding capital investment funded through the accelerated capital fund, and an increase in cash taxes.

"We are effectively executing on our priorities of delivering an exceptional customer experience, enhancing our video and voice products, and growing our commercial business. We recently completed our digital upgrade project, adding capacity to our network, and continue to expand our Shaw Go WiFi, bringing our Internet product beyond the home, now with over 30,000 access points in western Canada," Shaw added.

In Tuesday's regular trading session, SJR is currently trading at $22.70, down $0.60 or 2.58% on a volume of 20,099 shares. In the past 52-week period, the stock has been trading in a range of $21.32 to $25.46.