TORONTO – The strength of the iPhone combined with growth in its wireless division plus helped power Rogers to a solid third quarter.
Operating revenue for the quarter ended September 30 was up 2% to $3.03 billion from $2.98 billion a year ago, while overall operating profit was $1.15 billion, a 6% increase from $1.08-billion in 2008. Net income dipped from $495 million last year to $485 million.
"Our third quarter results represent a healthy balance of growth, cost control and margin expansion, and double-digit increases in cash flow generation and cash returns to shareholders" said president and CEO Nadir Mohamed, in a statement.
The wireless division accounted for $846-million of adjusted operating profit, a 22% jump from $693-million a year ago. Rogers said that the increase in network revenue was driven by the continued growth of its postpaid subscriber base and the year-over-year growth of wireless data.
Wireless data revenue increased by approximately 46% over the corresponding periods of 2008, to $372 million, and by $59 million from the second to the third quarter of 2009 which the company said “represents by far the largest sequential increase previously recorded”.
Wireless activated more than 370,000 smart phone, predominately iPhone 3G, BlackBerry and Android devices, during the quarter and subscribers with smart phones now representing approximately 28% of the overall postpaid subscriber base, up from 15% in the corresponding period of 2008.
The overall cable division showed a 3% increase in adjusted operating profit to $329 million from $318-million a year ago, though Rogers said competition and the economic recession resulted in lower net additions of cable products this quarter compared to other years.
Increasing levels of “product maturity” also contributed to slowing subscriber growth with cable Internet subscriber penetration at 70% of basic cable customers, digital penetration at 71% of basic cable households, and residential voice-over-cable telephony penetration at 40% of basic cable subscribers.
Over at the company’s media division, adjusted operating profit fell 16% to $36-million from $43-million. This primarily reflects revenue declines in its television, radio and publishing groups, driven by the on-going industry wide weakness in the advertising market, and at The Shopping Channel driven by a challenging environment for consumer discretionary retail sales. These decreases were partially offset by an increase in subscriber revenue at Sportsnet.
