TORONTO – While Rogers Communications reported its first quarter consolidated revenue grew 5% to reach $2.7 billion, it also saw a 10% drop in its net earnings.
For the quarter ended March 31, 2009, the telecom giant said its wireless, cable and media operations generated a profit of $309 million, down from $344 million for the same period in 2008. Despite a modest growth in sales, Rogers said in a news release that the cost of adding new smart phone customers, combined with weak advertising revenues in its media divisions, contributed to the decline in net income.
Digital cable subscribers grew by 35,000 in the quarter, resulting in 13% year-over-year growth to 1.59 million households. Digital penetration now represents approximately 69% of basic cable households, of which more than 619,000 households receive high definition TV services.
Rogers’ Internet subscriber base continued to grow during the quarter to reach 1.6 million, pushing penetration to approximately 44% of the homes passed by cable networks, and 68% of its basic cable customer base.
The company has 857,000 residential voice-over-cable telephony lines, bringing the total penetration of cable telephony lines to 37% of basic cable subscribers, up from 31% at March 31, 2008.
It added 72,000 new cell phone accounts in the quarter, and saw wireless data revenue increase 43% to $298 million from a year earlier. The wireless division activated more than 360,000 smart phone devices during the quarter, of which 40% were to new subscribers and the other 60% being existing subscribers who either upgraded devices or committed to new multi-year-term contracts.
Declines in advertising spending in publishing, radio and television caused revenue in Rogers’ media unit to dip 7% to $284 million, which resulted in a 73% drop in operating profits to $6-million.
While president and CEO Nadir Mohamed expressed satisfaction with the results, he also alluded that there may be tough times still ahead.
“While Rogers is operating from a position of business and financial strength, we are clearly negotiating through challenging times and have much hard work in front of us to drive the performance of the business forward," he said in the release.
