TORONTO — Rogers Communications Inc. said Wednesday that the business impact from its July network outage was “very isolated” as it reported its third-quarter profit fell compared with a year ago while revenue crept higher.
The telecommunications and media company said it refunded approximately $150 million in the quarter as a result of the outage and its promise to customers that it would provide five days of credits.
Rogers said it earned $371 million or 71 cents per diluted share in net income for the quarter ended Sept. 30, down from $490 million or 94 cents per diluted share in the same quarter last year.
The decrease was primarily due to the network outage-related credits and higher finance costs attributable to Shaw senior note financing, the company said.
Meanwhile, revenue for the quarter totalled $3.74 billion, up two per cent from $3.67 billion in the third quarter of 2021.
Rogers said excluding the impact of credits it gave customers due to the outage, its total revenue would have increased six per cent compared with a year ago.
On an adjusted basis, Rogers said it earned 84 cents per diluted share, down from an adjusted profit of $1.03 per diluted share in the same quarter last year.
Analysts on average had expected a profit of 86 cents per share and nearly $3.73 billion in revenue, according to estimates compiled by financial markets data firm Refinitiv.
Some of the effects of the outage in the quarter were offset by a strong wireless environment. Rogers saw total mobile phone net additions of 221,000 in the third quarter, up 30,000 from last year.
On the company’s earnings call with analysts, Rogers CEO Tony Staffieri said he hasn’t seen anything particularly “alarming or of concern” when it comes to churn — the closely watched metric of customers moving to other services — directly related to the July outage.
Staffieri said the company will continue to invest in its networks and customer experience.
Rogers reported capital expenditures of $872 million in the quarter, up 18 per cent, including a 52 per cent increase in network investment compared to last year.
Rogers also reaffirmed its full-year guidance ranges for 2022.
In a note to clients, Desjardins analyst Jerome Dubreuil said Rogers’ reiteration of its 2022 guidance is “encouraging.”
Looking ahead, Rogers said it remains “committed” to its takeover of Shaw.
The $26-billion proposed deal is currently before the Competition Tribunal as the Competition Bureau seeks to fully block it. Rogers is hoping to close the deal by the end of the year, with a possible further extension to Jan. 31, 2023.
Amid rising interest rates and ongoing inflationary pressures, Rogers said it is conscious of the impact on people’s pocketbooks but is not feeling it internally to a “material extent.”
The company said it is confident in its team, its balance sheet and networks as it navigates the current macroeconomic environment.
This report by The Canadian Press was first published Nov. 9, 2022.
Companies in this story: (TSX:RCI.B, TSX:SJR.B)
