CALGARY – Stable growth at Shaw Communications’ cable and digital phone divisions helped to drive up its third quarter earnings by 20%, the company announced Wednesday.
Consolidated service revenue for the quarter ended May 31, 2010 and year-to-date periods of $944 million and $2.78 billion, respectively, was up 10% over each of the comparable periods last year. Total service operating income before amortization of $436 million and $1.34 billion, respectively, improved 10% and 17% over the same periods. Excluding a one-time CRTC Part II fee recovery, the year-to-date increase in service operating income before amortization was 10%.
Net income of $158 million increased $19.5 million compared to the second quarter of fiscal 2010, mainly due to increased service operating income before amortization of $11.0 million and reduced amortization of $6.8 million. The current year-to-date period included debt retirement costs and amounts related to financial instruments of $82 million and $47 million, respectively. Excluding the non-operating items net income for the current three month period would have been $162 million compared to $131 million in the same periods last year.
"Today’s financial and operational results continue to reinforce the strength of our core business”, said CEO and vice chair Jim Shaw, in a statement. “Through our focus on the delivery of a superior customer experience and our disciplined management approach, we excel in the marketplace and drive sustainable, profitable growth. We remain on track to deliver on our financial guidance for the consolidated Cable and Satellite segments, including free cash flow comparable to 2009."
Service revenue in the Cable division was up 11% to $745 million, which Shaw said was primarily driven by customer growth and rate increases. Basic added 2,322 new customers, while digital customers increased by 87,092 to reach 1,595,619. The company’s digital penetration of basic now stands at 68.5%, up from 56.7% at August 31, 2009. Internet and digital phone lines grew by 25,661 to 1,796,973 and 66,123 to 1,044,410, respectively.
Service revenue in the Satellite division was $198 million for the quarter, up 4% over the comparable period last year. During the quarter, Shaw Direct added 1,856 customers and as at May 31, 2010, DTH customers now total 904,965.
