Rogers Communications saw its stock price rise more than 3 per cent on Wednesday as it reported its first-quarter gains.CARLOS OSORIO/Reuters
Rogers Communications Inc. RCI-B-T chair Edward Rogers is crediting the company’s new CEO, Tony Staffieri, for “strong signs of improvement” as the telecom reports higher first-quarter profit and revenue and an improved outlook for the year.
Canada’s largest wireless carrier saw its stock price rise more than 3 per cent on Wednesday as it reported its first-quarter gains, driven by a jump in new wireless customers and improvements in the economy.
“Since Tony’s appointment as CEO, Tony and the management team have already made a substantial difference, and our shareholders are showing their support,” Mr. Rogers said during the company’s annual meeting on Wednesday, adding that the stock price is up “a staggering 28 per cent” in the five months since Mr. Staffieri took the helm. Mr. Rogers also praised Mr. Staffieri for taking significant steps toward closing the $26-billion takeover of Shaw Communications Inc., including lining up the financing.
Mr. Staffieri took over the top job last November. A public battle for control of the wireless carrier resulted in the Toronto-based telecom’s previous chief executive officer, Joe Natale, being ousted after Mr. Rogers replaced five of the company’s directors. The move met opposition from his mother, Loretta Rogers, and sisters Martha Rogers and Melinda Rogers-Hixon.
But it was Ms. Rogers-Hixon, during Wednesday’s annual meeting, who nominated all of the company’s directors for election, including the five individuals whose appointments to the board she had opposed last fall. Rogers also added two new directors to its board on Wednesday: Loretta’s nephew, David Robinson, and Ryerson University president and vice-chancellor Mohamed Lachemi.
Earlier in the day, during a conference call to discuss the telecom and media giant’s financial results, Mr. Staffieri outlined the company’s three priorities: “Better execution across our three businesses, increasing our investments in our networks and customer service, and continuing our extensive efforts to successfully complete the Shaw transaction in the first half of 2022.
“I’m pleased to say we made progress in each of these areas in the first quarter,” he added.
The price of Rogers’ class B shares rose more than 3 per cent on the Toronto Stock Exchange, closing at $76.07. The rally came after the telecom reported $392-million in profit for the three-month period ended March 31, up 9 per cent from a year ago, and raised its projections for service revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the year. The earnings amounted to 78 cents per share, up from 71 cents per share. After adjusting for certain items, the earnings came to 91 cents per share, up from 78 cents.
Its revenue for the quarter came to $3.62-billion, an increase of 4 per cent from $3.49-billion during the same quarter last year.
Analysts had been expecting revenue of $3.63-billion and adjusted earnings of 83 cents per share, according to the consensus estimate from S&P Capital IQ.
Bank of Nova Scotia analyst Jeff Fan called the results better than he had expected, adding that the business benefited from “a healthy wireless market, stable competition and execution.”
Desjardins analyst Jérome Dubreuil said the cable business reported “surprisingly strong margins.”
“Management cited a price increase, lower content-related costs and lower people-related costs for the higher margins,” Mr. Dubreuil said in a note to clients.
Rogers, which is awaiting regulatory approval of its takeover of Shaw Communications, added 66,000 net new postpaid mobile phone customers during the quarter. That’s up from 22,000 net new postpaid subscribers during the first quarter of 2021.
The telecom lost 16,000 prepaid mobile phone customers during the quarter, compared with a loss of 56,000 a year ago. Postpaid subscribers are those who are billed at the end of the month for the services they used, versus prepaid customers, who pay upfront for wireless services.
Rogers is continuing to work toward completing its takeover of Shaw and expects the deal to close during the second quarter, Mr. Staffieri said.
The Canadian Radio-television and Telecommunications Commission has approved the takeover with some conditions. The Competition Bureau and the Department of Innovation, Science and Economic Development are still reviewing the merger.
Mr. Staffieri told analysts that Rogers is working with Ottawa to meet the government’s objective of encouraging wireless competition through the existence of a strong fourth wireless carrier.
On Tuesday, The Globe reported that Rogers has presented the federal government with a deal for rural internet provider Xplornet Communications Inc. to acquire Shaw’s Freedom Mobile, Canada’s fourth-largest wireless provider.
Mr. Staffieri declined to comment when asked by a financial analyst about the Xplornet deal. “There’s not a lot we can say, given the transaction is in front of the government bodies,” he said.
Mr. Rogers thanked several directors during the annual meeting, including his mother for her “enormous contribution” to the company over five decades as a director, as well as former chief financial officer Alan Horn, and Phil Lind, a trusted adviser to Mr. Rogers’s late father, company founder Ted Rogers. Mr. Horn and Mr. Lind supported Mr. Rogers during the recent boardroom battle.
Mr. Rogers also thanked Robert Gemmell, the lead director, calling him “a pillar of strength for corporate governance and for continuing to put the voices of all shareholders first.”
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TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
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