Shaw Communications Q2 Profit Up 25%, Reaffirms 2014 Outlook

(RTTNews) - Diversified Canadian communications company Shaw Communications, Inc. (SJR, SJR.B.TO) on Thursday reported a 25 percent increase in profit for the second quarter from last year, reflecting higher revenues and a one-time gain on the sale of some media assets. The company also reiterated its financial outlook for fiscal 2014.

Brad Shaw, chief executive officer of Shaw Communications, said, "Our focus on leading technology, customer service and value leadership continued throughout the quarter. We invested in the expansion of Shaw Go WiFi, now with over 35,000 hotspots, and launched new apps supporting our TV Everywhere service which delivers innovation, choice and value to our customers."

The Calgary, Canada-based company reported net income attributable to equity shareholders for the second quarter of C$215 million or C$0.46 per share, up from C$172 million or C$0.38 per share in the prior-year quarter.

The latest-period benefitted from a C$49 million gain realized on the sale of certain media assets as well as on lower interest expense and amortization, partially offset by higher income taxes.

Consolidated revenue for the quarter increased 2 percent to C$1.27 billion from C$1.25 billion in the same quarter last year.

Revenues for the cable division for the quarter increased 3 percent to C$839 million, driven by pricing adjustments and lower promotional activity. It also reflects a full quarter impact of the acquisition of Envision and disposition of Mountain Cable.

Satellite division revenues grew 5 percent from last year to C$220 million, primarily due to rate increases. This was partially reduced by lower customers and higher promotional activity.

However, revenue for the media division declined 4 percent to C$239 million, reflecting lower conventional advertising revenues driven by the Sochi Winter Olympics partially offset by increased subscriber revenues as well as the favorable impact of a retroactive adjustment.

The company's total operating income before amortization for the quarter declined 2 percent from the year-ago quarter to C$528 million, while operating margin contracted 160 basis points to 41.4 percent from last year.

Funds flow from operations declined 8 percent from the year-ago period to C$357 million.

During the second quarter, video subscribers decreased 20,758 or 1 percent to 1.99 million. Internet customers grew 12,767 or 0.7 percent to 1.91 million, and digital phone lines increased 8,075 or 0.6 percent to 1.37 million. Meanwhile, DTH customers decreased 1,405 or 0.2 percent to 0.89 million.

Looking ahead to fiscal 2014, Shaw Communications 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 in a range of C$625 million to C$650 million. Further, it expects a marginal decline in capital investment, excluding capital investment funded through the accelerated capital fund, and an increase in cash taxes.

SJR closed Wednesday's regular trading session at $24.28, up $0.31 or 1.29 percent on a volume of 220,734 shares.