Rogers CEO Vows Change After Profit Misses Analyst EstimatesGerrit De Vynck and Hugo Miller
Rogers Communications Inc.’s new chief executive officer vowed to fully review the wireless operator in search of ways to improve performance after profit missed estimates and subscriber growth trailed rival BCE Inc.
In his first public comments since taking over the top job in December, Guy Laurence said he wasn’t happy with last quarter’s results. “While there are areas of strength, overall they are not satisfactory to me, and over time I expect to do better,” he said on a conference call this morning.
Earnings were 69 Canadian cents (63 cents) a share, excluding one-time charges and gains, the Toronto-based company said today. That missed the 74 Canadian cents projected on average by 15 analysts compiled by Bloomberg. Sales were C$3.24 billion, below the average estimate of C$3.31 billion.
Laurence must combat BCE’s resurgence in the mobile-phone market while working to retain television subscribers as customers opt for Internet-delivered services such as Netflix Inc. Laurence, who took over as CEO in December after turning around Vodafone Group Plc’s U.K. operations, may start restructuring Rogers to make it more efficient, said Phillip Huang, an analyst at Barclays Plc, who rates the shares the equivalent of a hold.
Rogers fell 5.3 percent to C$43.28 at the close in Toronto, the biggest one-day drop since June. The stock has declined 10 percent this year.
“Expectations were low heading into results, but we believe the release is still lower than expected,” Huang said in a note to clients. He said Rogers missed his estimates for average revenue from customers on contracts and for the number of users who signed up for long-term subscriptions.
Rogers added about 34,000 wireless contract customers last quarter. That compared with an estimate of 47,000, based on a Bloomberg survey of eight analysts. BCE, based in Montreal, added 119,520 so-called postpaid customers in the period. Average revenue per contract customer was C$66.34, compared with the average estimate of C$67.03 from four analysts surveyed by Bloomberg.
Laurence’s tasks also include steering Rogers through a Canadian government auction of wireless airwaves. The 700-megahertz spectrum up for bid is prized because it allows carriers to more easily stream data-heavy content in densely populated areas. The auction began in January, and results haven’t been announced yet.
“Since joining, I’ve crisscrossed Canada meeting my team, external stakeholders and customers,” Laurence said. “I’ve also conducted numerous business reviews, been involved with the 700-megahertz spectrum auction and reviewed the regulatory agenda.”
He expects to present his new plan to the board in May and announce it publicly after that, he said.
(Rogers held a conference call to discuss its results at 8 a.m. New York time today. To access a replay of the call on the Internet, click here.)