Rogers Revenue Rises as Canada Reopening Boosts Mobile Usage

Ilya Banares
·2 min read

(Bloomberg) -- Rogers Communications Inc. said second-quarter revenue rose 14% to C$3.58 billion ($2.8 billion) compared with a year earlier, close to analysts’ average estimates of C$3.56 billion. The shares fell as much as 2%.

The result comes as governments across Canada have eased Covid-19 restrictions, with vaccinations accelerating. Rogers, as the country’s largest wireless company by subscribers, is more exposed to the loss of roaming revenue caused by travel restrictions.

Key Insights

The Toronto-based company added 99,000 postpaid wireless subscribers. Average revenue per user rose 7 Canadian cents to C$49.16 as a result of higher roaming revenueRogers’ profitability met expectations. Adjusted diluted earnings were 76 cents per share, which was in line with the average analyst estimate.“Our solid performance in the second quarter is a result of strong execution across each of our business units as the economy continues to recover from pandemic lockdowns,” Chief Executive Officer Joe Natale said in the release.“As Canada emerges from the pandemic, our financial position and increased regulatory certainty for facilities-based providers enables us to continue enhancing connectivity,” he added.Natale said during a conference call with analysts that the company is still on track to complete its acquisition of Shaw Communications Inc. by the first half of 2022.“The stock has outperformed its peers since the end of the 1Q reporting season, which we believe was due to the reopening trade,” Desjardins analyst Jerome Dubreuil wrote in a July 12 note to investors.The report comes as the federal government nears an announcement on the results of the 3,500 MHz spectrum auction on July 23. It was previously reported that Canada raised about C$8 billion, a “shockingly high” figure according to one analyst.

Market Reaction

Rogers shares were up 13% this year as of Tuesday’s close, slightly behind the 14.4% gain of the S&P/TSX Composite Index. They were down 1.4% to C$66.01 at 10:45 a.m. in Toronto.

(Updates share price change in first and last paragraphs.)

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