Shaw's Q2 profit up as it cuts costs; op slows wireless build-out
Thanks in part to increased revenues in its cable and satellite divisions, Shaw Communications' second-quarter net profit rose 20 percent.
Shaw's earnings for the quarter that ended Feb. 28 were C$167.3 million, or 37 cents per share, on revenue of C$1.2 billion, both of which were in line with analysts' estimates.
Revenues for Shaw's cable division increased 5 percent to C$769 million, due primarily to rate increases and subscriber growth. Shaw's satellite division revenues increased 2 percent to C$204 million, while media division revenues rose 8 percent to C$244 million.
Last month, Shaw announced it had cut 550 jobs, including 150 managers. Shaw said this morning that the restructuring cost for the layoffs was between C$25 million and C$30 million but that it would save the company more than C$50 million annually.
"Our industry is transforming, and competition in our core business continues," Shaw CEO Brad Shaw said. "We have taken decisive and immediate steps to streamline our organizational structure. In this changing landscape, managing costs and operating efficiently are essential. The recent actions taken, combined with our advanced delivery networks and leading portfolio of media assets, ongoing innovation and technology enhancements, position us for continued long-term growth. None of these measures reduce in any way our commitment to an exceptional customer experience."
Shaw is also pushing back the launch date of its wireless network to later next year as the company waits for LTE technology to mature. Shaw, which bought wireless spectrum in 2008, originally had planned to build an HSPA+ network.
In the second quarter, Shaw lost 13,662 basic cable subscribers for a total of 2.31 million. The company added 35,403 digital customers for a total of 1.75 million. Shaw's data subscribers rose by 10,772 to 1.85 million, while its digital phone lines were up by 32,512 to 1.18 million.