Canada's Rogers Posts Fall in Profits As Revenues Flatline

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Canada's Rogers Communications has reported flat revenues for the first quarter of this year as it saw an uncharacteristic decline in wireless revenues and posted a decline in its net profit.

Revenues were barely changed at C$3.02 billion, while net profit fell by 13 percent to C$307 million.

Consolidated operating revenue was nominally lower than the first quarter of 2013, reflecting a 2% decline in Wireless revenue, offset by growth at Business Solutions (up 1%) and Media (up 8%).

The decline at Wireless was mainly related to pricing changes and lower priced roaming plans introduced mid-2013. Excluding the decline in roaming revenue this quarter compared to the same period last year, network revenue would have been approximately flat and data revenue would have increased 16%.

Cable revenue was flat as continued Internet revenue growth was offset by television subscriber losses, promotional activity and the timing of pricing changes.

Wireless data revenue grew 10% exceeding voice revenue for the first time and now represents approximately 51% of total network revenue.

The company activated and upgraded approximately 579,000 smartphones this quarter, compared to approximately 673,000 in the same period last year. The decrease was mainly because there was a 14% reduction in hardware upgrades by existing subscribers this quarter, which the company said is partly due to the move from three to two year contracts and the associated pricing changes.

Basic cable subscriber losses moderated, both sequentially from the fourth quarter of 2013 and year-over-year, to 20,000.

The reductions in adjusted net income are primarily the result of higher depreciation and amortization expenses, finance costs, and operating profit declines at the Cable and Media divisions.

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