- Profits fall 16%
- Results fall short of forecasts
- Stock down 5.7%
Rogers Communications will tighten its belt to deal with tough competition in the wireless and cable TV markets that has cut into profits, shareholders were told Wednesday.
"In the short term, we're addressing the cost side of the equation," chief executive Nadir Mohamed said after Rogers's annual meeting.
"There's clearly going to be pressure on the top line."
Shares in Rogers closed down almost six per cent in afternoon trading Wednesday after the company reported disappointing first-quarter financial results. The stock was down $2.21 at $36.81 per share on the Toronto Stock Exchange.
The Toronto-based company's wireless division has faced tougher competition from players big and small, while its cable division is battling fellow industry giant Bell.
Mum on more job cuts
Rogers laid off about 300 employees across its operations in March, with the cuts focused on management and head office positions. Mohamed said Wednesday that Rogers will look at trimming discretionary spending and supply costs, but did not mention any further job cuts.
He assured analysts and shareholders that the telecom company intends to improve its earnings before the end of 2012.
"As I look to the balance of the year, I expect this competitive intensity to continue, and with moderating revenue growth... cost management is absolutely imperative," he said at the meeting, which was also webcast.
Rogers posted an adjusted first-quarter profit of $356 million, a drop of 16 per cent from $423 million in the same quarter last year.
On a per share basis, adjusted earnings slid to 67 cents per share, below analyst expectations of 76 cents per share, according to Thomson Reuters.
Revenue of $2.95 billion also missed analyst expectations and came in one per cent below the $2.99 billion reported in the same period in 2011. Analysts had estimated revenue of $3.05 billion for the first quarter of fiscal 2012.
Following Tuesday's earnings release, Desjardins Securities Inc. analyst Maher Yaghi trimmed his sales forecasts for Rogers's cable and wireless divisions by two per cent and one per cent, respectively.