Rogers Communications Inc. announced an 11 per cent increase in its dividend Wednesday as the telecom giant reported higher fourth-quarter profits that easily beat analyst expectations.
"The results clearly reflect the strength of our asset mix as well as what we see as a continuation of what we see as an extremely competitive period in the market," president and CEO Nadir Mohamed said during a conference call with analysts.
Mohamed said Rogers continued to demonstrate success on the sales front in the quarter with a 34 per cent share of post-paid growth among the major wireless players.
"And frankly could have generated even higher growth adds if we had not been constrained on supply of the iPhone 4S during the quarter," he said in describing "a relatively balanced set of financial and subscriber results."
Mohamed noted that the company had returned $564 million of cash to shareholders in the fourth quarter through a combination of dividends and share buybacks, up six per cent from Q4 of last year.
"And as you saw from our dividend and share buyback announcement of this morning, we intend to continue returning significant amounts of cash to shareholders in 2012," he added.
Besides raising its quarterly dividend to 39.5 cents per share or $1.58 on an annualized basis, Rogers also announced a renewal its share buyback program of up to $1 billion or 10 per cent of its class B shares in 2012.
Rogers said net income in the three months ended Dec. 31 grew eight per cent to $327 million, or 61 cents per diluted share, from $302 million, or 50 cents per share in the prior-year period.
Operating revenue grew to $3.18 billion from $3.14 billion.
Wireless revenue grew two per cent, adding 42,000 postpaid wireless subscribers. Rogers said the increase was driven by a record number of new smartphone customers and iPhone activations.
Revenues in its cable and media businesses were each up three per cent.
On an adjusted basis — excluding taxes and one-time items — Rogers earned $372 million or 70 cents per share, up from $338 million or 60 cents per share in the year earlier.
That beat analysts' estimates compiled by Thomson Reuters, which put earnings per share at 67 cents and revenue at $3.2 billion.
Operating profit increased 83 per cent in the media segment, and by eight per cent in its cable operations, but was offset by a five per cent decline in its wireless business, driven by the upfront costs associated with the high level of smartphone activations and iPhone sales.
A decline in the voice average monthly revenue per user also contributed to the overall decline, but was slightly offset by a 19 per cent growth in data revenue.
About 791,000 additional smartphones were activated in the quarter.
Toronto-based Rogers is Canada's largest cable TV operator, a major magazine publisher, TV and radio broadcaster and owner of the Toronto Blue Jays.
The company's wireless division has faced tougher cellphone competition from players big and small.
MLSE deal means new content
Last December, Rogers and Bell Canada teamed up on a $1.07-billion bid for a majority stake in the country's biggest sports franchise company, Maple Leaf Sports & Entertainment.
The move is to help feed consumers' growing thirst for sports content to broadcast on everything from smartphones to tablets to televisions.
The two companies, fierce rivals in the delivery of cellphone and Internet services, have said they will each pay the Ontario Teachers' Pension Plan about $533 million for a 37.5 per cent chunk of MLSE.
Minority owner Larry Tanenbaum, through his company Kilmer Sports, will boost his current stake in MLSE by five per cent to 25 per cent.