Rogers Communications Inc. (RCI/B), Canada’s largest wireless carrier, reported second-quarter sales that trailed analysts’ estimates as customers cut back monthly spending on smartphone data and long-distance calls.
Sales were little changed at C$3.11 billion ($3.05 billion), the Toronto-based company said today in a statement. That compares with the C$3.14 billion average of 16 analyst estimates compiled by Bloomberg.
Rogers is being squeezed between smartphone consumers reining in their monthly spending and the subsidies the wireless operator continues to pay Apple Inc. (AAPL:US) to carry its iPhone. Sluggish economic growth and rival wireless entrants are also forcing the carrier to offer cheaper calling plans, further crimping revenue.
Rogers added 87,000 subscribers with contracts, the long- term customers who typically buy a smartphone and spend more on data, less than the estimate of 110,000 from Maher Yaghi, an analyst at Desjardins Securities in Montreal. He rates Rogers a hold.
The carrier’s average monthly revenue from both customers on contracts and prepaid clients, who usually opt for cheaper calling plans, fell to C$59.10 during the quarter, down from C$60.26 a year earlier.
Rogers is the first of the big three Canadian carriers, which along with BCE Inc. (BCE) and Telus Corp. (T) control more than 90 percent of the nation’s wireless market, to report second- quarter earnings.
Profit excluding some items was 91 Canadian cents a share helped by job cuts, beating the analysts’ estimate of 86 cents.
Net income was C$400 million, or 75 cents a share, compared with C$410 million, or 74 cents, a year earlier.
Rogers yesterday fell 1.2 percent to C$37.24 in Toronto. The shares declined 5.1 percent this year through yesterday.
To contact the reporter on this story: Hugo Miller in Toronto at firstname.lastname@example.org
To contact the editor responsible for this story: Nick Turner at email@example.com