Rogers Communications Inc (TSE:RCI) reported better-than-expected fourth quarter profit as Canada's largest cable and telecom company’s investments in its wireless business paid off as it signed up more subscribers.
For the quarter ended December 2018, the company said it added 112,000 net postpaid subscribers up from 72,000 new customers a year earlier.
The wireless, cable, internet and media company also said it expects to spend between C$2.85 billion and C$3.05 billion on capital projects in 2019, up at least C$160 million from last year when capital spending totaled $2.79 billion.
CEO Joe Natale told analysts that the strength of Roger’s 2018 results gave it confidence to increase both its capital budget and its quarterly dividend. Rogers announced an annualized dividend rate hike of 4.2% to C$2 per share effective immediately.
Rogers’ net income rose to C$502 million in the fourth quarter, from C$499 million. Revenue totaled $3.94 billion, up from $3.73 billion in the fourth quarter of 2017, when Rogers experienced lost sales during the important pre-Christmas period due to system malfunctions.
On a per share basis, the company earned C$0.97 per share, flat compared with a year earlier. Analysts on average expected Rogers to have adjusted earnings of $1.08 cents per share, according to Thomson Reuters Eikon. Revenue was anticipated to come in at nearly $3.88 billion for the quarter ended December 31.
Wireless segment holds up
The CEO said the company's wireline segment, which includes residential cable and internet services, also performed well despite intense price discounting from its major rival, which is Bell Canada.
"There's a continued demand for broadband data — to the tune of about 30% growth per year. So it's very strong demand across the board," Natale told analysts on a conference call.
"Our goal is to continue to leverage the power of Ignite (the company's latest internet and TV services) to offer our customers the choice and help them manage the whole home around that," he added.
Contact Uttara Choudhury at [email protected]