Shaw profit slips
Plans wireless rollout next year
Calgary-based Shaw Communications Inc.'s profit slipped 11 per cent in its second quarter despite growth in its revenue, the cable television, internet and phone company reported Friday.
Shaw had net earnings of $138.7 million, or 32 cents per share, for the three months ended Feb. 28, down from $156.6 million, or 36 cents per share, in the same period a year earlier. Analysts had expected 33 cents a share.
The company also said it was increasing capital spending for its burgeoning wireless business, announcing plans to invest $100 million this fiscal year in a bid to launch the division by late 2011.
Genuity Capital Markets analyst Dvai Ghose wasn't impressed with the lack of detail about Shaw's wireless plans.
"It's all very, very vague," Ghose said. "What they don't tell you is how much more they plan to spend, which markets."
Shaw spent $190 million on wireless licences nearly two years ago, when Ottawa allowed new entrants into an industry dominated by Rogers Communications Inc., Bell Canada and Telus Corp.
Since that time, Globalive's Wind has launched a new service and other networks from Public Mobile, Mobilicity and Quebecor Inc.'s Videotron are expected to launch in the coming months.
Ghose said he doesn't understand why it has taken Shaw so long to join the game.
Has lost advantage
"They certainly lost early-mover advantage by definition," Ghose said.
Shaw's senior vice-president of planning, Michael D'Avella, said when its wireless service makes its debut, mobile phone technology will have improved greatly from where it is today, and the company will be able to offer the most leading-edge products.
"Waiting was actually not a bad thing. It was the right thing to do," he told a conference call with analysts.
Last year's earnings got a boost from a $23-million tax recovery, while the costs of paying down debt dragged profits down for the first half of the 2010 fiscal year.
The drop came despite an 11 per cent increase in revenue from a growth in cable customers and higher pricing. Revenue was $929.1 million, compared with $839.1 million last year.
"We continue to grow in the face of intense competition and a slow economy," CEO Jim Shaw said in a statement. "We have built the foundation for growth with our advanced broadband network, strong customer relationships and prudent management approach."
With files from The Canadian Press