Rogers Communications Inc.’s third-quarter profit and revenue fell compared with a year ago due to the COVID-19 pandemic, but the company beat analyst estimates after rebounding from the second quarter.
The wireless, cable and media company said Thursday it earned $512 million or $1.01 per diluted share for the quarter ended Sept. 30.
That was down from a profit of $593 million or $1.14 per diluted share in the third quarter of 2019 but up from the second quarter, when the pandemic’s first wave gripped the country.
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On an adjusted basis, Rogers says it earned $1.08 per diluted share for the quarter, down from an adjusted profit of $1.19 per diluted share a year ago.
Analysts on average had expected an adjusted profit of 78 cents per share and revenue of $3.34 billion, according to financial data firm Refinitiv.
“Our results show we are managing the environment effectively, and our long-term strategy is sound,” Rogers chief executive Joe Natale told analysts in a conference call to discuss the results.
He added that competition between Canada’s wireless carriers intensified in the third quarter, especially involving flanker brands (which include the company’s Fido and Chatr services).
“We were not the aggressor, just to be absolutely clear, but (there) is a lot of competition in the flanker brand as the market kind of woke up again,” Natale said.
Other flanker brands in the market include BCE Bell’s Virgin Mobile and Lucky Mobile and Telus Corp.’s Koodo and Public Mobile brands.
Each of the three national carriers use their flagship and flanker brands to compete with each other as well as regional carriers such as Shaw’s Freedom Mobile and Quebecor’s Videotron, which also have two wireless brands each.
Revenue from across the Rogers business totalled nearly $3.67 billion, up from the second quarter but down from $3.75 billion in the same quarter last year.
Wireless service revenue fell nine per cent from the third quarter of 2019, mainly due to less overage revenue and $90 million less in roaming revenue amid global travel restrictions during COVID-19.
Rogers, which generates more than half of its total revenue from wireless services and related products such as smartphones, said it now has 2.2 million wireless customers (about one-fifth of the total) on unlimited plans.
Unlimited data plans don’t charge extra money if a monthly amount is exceeded, but the speed of downloads may be slowed until the next billing cycle.
Rogers chief financial officer Anthony Staffieri said wireless overage fees were down about $50 million from last year’s third quarter, when the unlimited plans were new and added that overage revenue is expected to continue to gradually decline until mid-2021.
Revenue from the company’s cable and internet services fell one per cent from last year with consistent service revenue and a decrease in equipment revenue.
Rogers Media revenue increased one per cent primarily as a result of higher revenue associated with the resumption of NHL hockey, partially offset by lower revenue at the Toronto Blue Jays, which were unable to play in Canada due to COVID.
The Rogers cable and internet network is primarily in Ontario, as well as parts of Atlantic Canada. The company has been looking to expand its base in Ontario and to make inroads in Quebec with a proposal to buy Cogeco’s Canadian operations.
However, an $11.1-billion cash offer to Cogeco from Altice USA, with support from Rogers, was rejected Sunday by Cogeco’s controlling shareholder and again on Tuesday in a unanimous vote of Cogeco directors.
Altice USA has said its offer, which would see it sell Cogeco’s Canadian operations to Rogers and keep the company’s U.S. business for itself, remains on the table until Nov. 18.
Asked during the Thursday call if Rogers might sell its stake in Cogeco if it can’t buy its Canadian operations, Natale provided a non-specific answer.
“If it’s not accepted, we would do what you would expect us to do,” Natale said.
“We’ll review our capital allocation parties with our board as part of our normal course of planning and strategic priority setting. And we’ll come back to the investment community on what our thoughts and plans are on capital allocation.”