Cable leads Cogeco profit growth
Copyright 2005 Toronto Star Newspapers, Ltd. The Toronto StarJuly 12, 2005 TuesdayFrom Lexis Nexis
Cogeco Inc. reported a stronger third-quarter profit and raised its dividend yesterday as higher sales and earnings at its cable-TV arm offset weakness in its media operations.
The Montreal-based firm, whose main unit is Cogeco Cable Inc., said net income rose to $4.96 million, or 30 cents a share, in the quarter ended May 31, from $3.8 million, or 23 cents a share, in the year-earlier period.
Revenue rose 3 percent to $173.4 million.
The results prompted Cogeco Inc. to raise its quarterly dividend to 6.25 cents a share from 5.25 cents. The cable arm doubled its quarterly dividend to 4 cents.
But Cogeco Inc. warned that for fiscal 2005, it now expects a loss of about $21 million, mainly due to the impairment of goodwill at its television operations. Excluding this impairment, it forecast a profit of about $9 million.
Next year it expects net income of about $11 million.
Revenue at its media arm, which includes a 60 percent stake in the French-language TQS television network and radio stations in Montreal, Quebec City and Sherbrooke, fell by 7.7 percent to $33.4 million.
The group's strength came from Cogeco Cable Inc., Canada's Number 4 cable provider, where revenues rose 5.8 percent to $140.1 million. The cable arm's profit jumped to $8.2 million, or 21 cents a share, from $1.85 million, or 5 cents a share.
Cogeco Cable said its basic cable subscriber base fell by 3,523 to 827,324 at quarter's end, though digital terminals rose by 8,739 to 287,962. High-speed Internet subscribers rose by 5,731 to 274,873.
Cogeco Cable raised its forecast for fiscal 2005 net income to $25 million from $22 million. It also raised its outlook for high-speed Internet subscriber additions.
For fiscal 2006, the cable arm forecast net income of $41 million on revenue of between $583 million and $588 million.