Shaw profit up 64% on lower costs - Action News
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Shaw profit up 64% on lower costs

Shaw Communications Inc. says it had profit of $192 million or 40 cents per share in fourth quarter, an increase of 64 per cent.

Subscriber base on cable, satellite shrinks as internet subscribers grow

Shaw Communications Inc.says it had profit of $192 million or 40 cents per share in fourth quarter, an increase of 64 per cent.

The Calgary-based telecommunications and media company said it had cut costs in the quarter, including lower amortization and interest expenses.

Free cash flow an important measure fortelecomcompanies that measures discretionary cash after current debt obligations jumped to $143 million in the three months ended Aug. 31 from $61 million a year before.

Revenue rose by 1.4 per cent to $1.26 billion, which was slightly below estimates of $1.27 billion according to data compiled by Thomson Reuters.

Analysts were disappointed with Shaw's subscriber numbers, which totalled1.96 million cable subscribers, 1.93 million internet customers and 1.37 million digital phone lines plus 880,623 direct-to-home satellite customers.

Its video customers are in decline at the rate of 83,000 a year and direct-to-home satellite customers are down by 20 per cent. However internet customers continue to climb and revenue from the cable division is up.

Structural changes ahead

Shaw is competing with Rogers and Bell for new cable, satellite and internet customers. All three companies face major restructuring as consumers vow to cut the cord and get their television from the internet.

Net income for the full year to August 2014 was$887 million or $1.84 per share, a 13 per cent rise over the previous year, when it earning $784 million or $1.64 per share.

Shaw's cable division provided $837 million of revenue in the quarter, satellite generated $220 million and the media division that includes Global Television and specialty TV channels provided $231 million during the summer quarter.

Chief executive officer Brad Shaw said the fourth quarter reflects the strength of the business.

"Our investments in programming, technology and innovative products combined with our focus on exceptional customer experience and operational efficiencies continues to drive profitability and long term growth," Shaw said in a statement.

It will soon launch online streaming service Shomi in collaboration with Rogers.

RBC Dominion analyst Drew McReynolds said the cable division financial results were below expectations but its subscriber results were in line.

McReynolds also said that Shaw's preliminary guidance for the 2015 financial year that began Sept. 1 was slightly below expectations.

With files from the Canadian Press