CALGARY – While not entirely applying the brakes, Shaw Communications confirmed Wednesday that it is slowing down the construction of its new wireless cellphone network, despite investing $42.1 million in the initiative in this quarter alone.
That was just one of the surprises from new CEO Brad Shaw while announcing the company’s second quarter financial results. He also confirmed that approximately 550 employee positions were eliminated last month, including 150 at the management level.
But the news wasn’t all bad. Consolidated revenue for the second quarter ended February 28, 2011 was $1.20 billion, up 28.8% over the comparable period last year, which the company said was primarily due to the acquisition of Shaw Media, as well as rate increases and growth in its Cable and Satellite divisions. Net income was $167 million, compared to $139 million year-over-year.
Revenue in its Cable division was up 4.9% to $769.4 million, though Shaw lost 13,662 net basic cable customers to end the quarter with 2,313,104. Digital customers increased 35,403 this quarter to top 1,748,538, and digital phone lines increased 32,512 to 1,178,660. Shaw added only 10,772 Internet subscribers this quarter, far fewer than the 26,735 it added in the same period last year, to total 1,848,390.
Shaw’s Satellite division reported revenues of $204 million for the quarter, up 1.8% over the same period last year, and the addition of 2,176 new customers to end the quarter with 906,433. Revenue in its Media division was $243.9 million for the quarter.
"The competitive environment has moderated revenue growth this year in our core business and presented an increased level of risk to our forecast”, CEO Shaw said in a statement. “We plan to continue to make adjustments in our business as necessary to meet the changing circumstances."
With respect to 2011 guidance, Shaw said that it anticipates continued growth in the core Cable and Satellite business, though expects that the growth rate of core consolidated operating income before amortization will decline modestly compared to last year “as a result of competitive market pressures and higher programming costs”.
For more on Shaw’s second quarter financial results, click here.
