CALGARY – Third quarter profits fell 8.3% at Shaw Communications as the company continued to lose video and landline phone subscribers.
Shaw said Thursday that its net income for the quarter ended May 31, 2015 was $209 million, down from $228 million for the same period last year, which included the impact of a $55 million (or $41 million on an after tax basis) write-down of IPTV assets.
Consolidated revenue for the quarter was $1.42 billion, up 5.7% from $1.34 billion year-over-year, primarily attributable to the new Business Infrastructure Services division due to the acquisition of ViaWest as well as customer growth in Business Network Services. Total operating income before restructuring costs and amortization of $643 million improved 7% over $601 million in the prior year.
Free cash flow for the three month period of $256 million increased 6.7% from $240 million in the third quarter of 2014.
Shaw’s consolidated Consumer and Business Network Services subscribers for the quarter were 1,881,547 cable video subscribers, 1,949,842 Internet customers and 1,341,734 digital phone lines. During the quarter, cable video subscribers dropped by 24,524, Internet customers increased by 7,212, and digital phone lines tumbled by 20,974. Satellite customers totalled 851,569, a decrease of 2,820 year-over-year.
Consumer and Business Network Services, excluding named and wholesale customers, had 6.0 million revenue generating units (RGUs), which represents the number of products sold to customers. During the quarter, RGUs dropped by 41,106 and included a consumer digital phone loss of 26,628 as the company continues to focus on “high value” RGUs.
The company is continuing to invest in Shaw Go WiFi, which now providing users with carrier-grade Internet connectivity at approximately 65,000 hotspots. More than 660,000 Internet customers were registered on the network which had connected over 1.8 million devices by the end of May.
CEO Brad Shaw unveiled that the company is working with Comcast on a technical trial of their cloud-based X1 platform, which he said “offers customers a seamless experience across multiple screens and devices both in and out of the home."
“As we move into the final quarter of the year we are on track to deliver our fiscal year financial guidance with operating income before restructuring costs and amortization expected to be at the lower end of our 5% – 7% guidance range and free cash flow expected to exceed $650 million”, Shaw said in a statement. “We continue to execute on our strategy to maximize shareholder value through leveraging our network infrastructure, and offering our customers leading edge products and services that they value."
