Shaw posts healthy profit in Q3
Thanks in part to increased subscriber growth in its cable division, Canadian cable operator Shaw Communications' third-quarter earnings increased by almost 20 percent.
For the three months that ended May 31, Shaw earned $158 million, or 37 cents per share, compared with $132 million, or 31 cents per share, in the same quarter a year ago. Analysts polled by Thomson Reuters had projected profits of 34 cents per share. Shaw's revenue for the quarter increased by 10 percent to $944 million.
Service revenue in Shaw's cable division was up 11 percent and 12 percent for the three- and nine-month periods, respectively, to $745 million and $2.19 billion. Shaw said the increases were primarily driven by customer growth and rate increases.
Service revenue in the satellite division was $198 million and $593 million for the quarter and year-to-date periods, respectively, up 4 percent over each of the comparable periods last year.
Shaw's digital customers, which included Internet and TV subscribers, increased 87,092 to 1.6 million, while Internet and digital phone lines grew by 25,661 to 1.8 million and 66,123 to more than 1 million, respectively. Shaw's basic subscribers were up 2,322.
"Today's financial and operational results continue to reinforce the strength of our core business," said Shaw CEO Jim Shaw. "Through our focus on the delivery of a superior customer experience and our disciplined management approach, we excel in the marketplace and drive sustainable, profitable growth. We remain on track to deliver on our financial guidance for the consolidated cable and satellite segments, including free cash flow comparable to 2009."
Shaw has been working on the launch of its own wireless network after spending $190 million on wireless licenses two years ago. Earlier this week, Shaw announced it had selected Nokia Siemens Networks' gear for its wireless network.
"We continue to develop our wireless business plan and during the quarter commenced initial activities investing over $9 million on this strategic initiative," Shaw said. "We plan to invest up to $100 million through to the end of the fiscal year."