TORONTO – Rogers’ decision to pull the plug on its own IPTV product pushed it in to the red with a $9 million loss for its fourth quarter.
On Thursday, Rogers posted a $484-million charge related to discontinuing its IPTV product when it opted to go with Comcast’s X1 platform instead. Adjusted net income increased 15% to $382 million this quarter from $331 million in the same period last year, as a result of higher adjusted operating profit, lower depreciation and amortization, and lower finance costs, partially offset by higher income tax expense.
Consolidated revenue for the period ended December 31, 2016 increased 2% this quarter to $3.51 billion, largely driven by Wireless service revenue growth of 6%. Wireless service revenue increased primarily as a result of a larger subscriber base and the continued adoption of higher-value Share Everything plans and the increase in data usage on these plans. Cable revenue increased marginally as Internet revenue growth of 9% was largely offset by the decline in Television and Phone revenue. Media revenue decreased as a result of fewer postseason Toronto Blue Jays games compared to last year, lower overall advertising revenue, and lower circulation revenue within publishing, partially offset by higher sales at The Shopping Channel (TSC).
Free cash flow of $392 million was up 43% year-over-year as a result of increased adjusted operating profit and lower additions to property, plant and equipment, partially offset by higher cash income taxes.
"We ended 2016 with continued momentum and strong operating performance in the fourth quarter” said Rogers’ chairman and interim president and CEO Alan Horn, in a statement. "Our momentum to date as well as our commitment to further improve the customer experience, and enhance our execution, position us well to achieve our stronger growth targets for 2017."
Former Telus CEO Joe Natale is expected to take over as president and CEO effective July 2017, the company added.
Rogers said that fourth quarter Wireless service revenue growth of 6% was the highest since 2010 and postpaid net additions of 93,000 were the highest of any fourth quarter since 2009.
The company ended the quarter with 8.56 million wireless postpaid customers and 1.72 million prepaid customers, up 62,000 and 11,000, respectively from the same period last year. On the TV side, Rogers lost 13,000 cable customers to fall to 1.82 million; added 30,000 Internet customers to sit at 2.15 million broadband subs; and added 4,000 home phone customers and now has 1.09 million of those households.
