CALGARY – While subscriber losses worried some on Bay Street (the company dropped 28,000 video subscribers in the first quarter of fiscal 2013, ended November 30, 2012) Shaw Communications posted overall positive operating results for the three months ended November 30, 2012.
Consolidated revenue for the three month period of $1.32 billion was up 3% compared to the same period last year and total operating income before amortization of $601 million improved 6% over the comparable period. Free cash flow for the quarter was $244 million compared to $119 million for the same period last year. Increased operating income before amortization and reduced capital investment were the main drivers of the quarterly improvement said the company in its press release.
"The business performed well in the quarter building on the positive momentum from the second half of last year,” said CEO Brad Shaw in the press release. “We continue to leverage our portfolio of assets to deliver innovative new offerings and enhanced services, providing choice and value to our customers."
Net income of $235 million for the quarter compared to $202 million during the same period last year. Increased operating income before amortization accounted for the improvement. Revenue in the Cable division of $809 million for the current three month period increased 2% over the comparable period, reads the press release. Cable operating margin was almost 49% reflecting the continued balance of subscriber growth and profitability.
Shaw Direct satellite revenue of $214 million for the three month period improved 2% compared to the same period last year and operating income before amortization for the current quarter was up 7% to $74 million.
At Shaw Media, revenue for the quarter of $319 million increased almost 7% over the same period last year and operating income before amortization of $131 million was up 9%. Improved advertising and subscriber revenues were partially offset by higher programming costs. However with more shows in the top-10 than in past years on Global TV, that money seems well spent.
“Financial results were much better than expected,” said Scotia Capital analyst Jeff Fan in a note to clients. “The subscriber results were lower than expected and the ‘bears’ will probably point to the weak TV subs but we believe this reflects management's sensible moves that will help EBITDA, margins, and FCF going forward.
“Subscriber results were lower than expected, but this reflects rational pricing behaviour to protect pricing and margins until Telus slows its push,” writes Fan.
– Greg O’Brien
