Rogers Communications' Q3 profit falls
Last Updated: Tuesday, October 26, 2010 | 9:17 AM ET
CBC News
Rogers Communications Inc.'s third-quarter profits declined as new wireless competitors grabbed more subscribers in the latest period, the company said Tuesday.
The Toronto-based company earned $370 million, or 64 cents a share, on a net-income basis for the three months ended Sept. 30.
Those earnings represented a drop of 24 per cent compared to the same period a year earlier when Rogers made $485 million, or 79 cents a share.
Slow revenue growth continued to plague Rogers as top-line sales inched up by three per cent in the latest period, reaching $3.2 billion in the quarter.
Sales slump
Rogers officials called the third-quarter numbers solid.
"The third quarter results demonstrate continued steady growth in new subscribers, revenues and free cash flow," said Nadir Mohamed, Rogers' president and chief executive officer.
Despite such assurances, however, the third-quarter represented the seventh straight period in which sales growth failed to exceed five per cent.
For the first nine months of 2010, cash-in-the-door for Rogers rose by only four per cent.
New competition
One reason for Rogers' financial stumble is the appearance of new players on the wireless landscape — Wind Mobile, Mobilicity and Public Mobile — firms that have aggressively targeted new subscribers.
As a result of more competition, the number of Rogers net new users slumped by 25 per cent, as the company added 125,000 new customers in the latest three months.
Indeed, for the first three quarters of 2010, the company experienced a drop in new subscribers of 36 per cent, to 270,000, down from 419,000 for the same period one year earlier.
In response to the new companies, Rogers introduced its Chatr discount brand, an offering that could have potential high-paying customers signing up for the cheaper service, analysts said.
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