Higher cable, satellite prices boost Shaw's profit
(Reuters) - Canada's Shaw Communications Inc reported stronger-than-expected quarterly results and raised its cash-flow forecast, sending its shares up 3 percent in early trading.
But the company, the dominant cable TV operator in Western Canada, managed only a marginal rise in third-quarter profit as it lost subscribers to its video cable and satellite TV services.
Shaw said the number of subscribers to its video services fell by 26,578, or 1.3 percent, to 2.07 million in the quarter, while the number of those taking its "direct to home" satellite service slipped by 2,930 or 0.3 percent, to about 904,000.
"Subscriber losses in the core cable TV business were pretty much in line, maybe a little worse than anticipated," said David Heger, an analyst at brokerage Edward Jones.
"But they were better than they were in the (second) quarter. Perhaps they're starting an improving trend."
Shaw, which also operates the Global TV network, raised its 2013 cash-flow forecast to C$590 million-C$600 million from C$550 million and said it plans dividend increases of 5 to 10 percent in each of the next two years as a result of the higher cash flows and favorable market conditions.
The company also has 19 specialty networks including HGTV Canada, Food Network Canada, the History channel and Showcase.
Shaw's net income rose to C$250 million, or 52 Canadian cents per share, from C$248 million, or 53 Canadian cents per share, a year earlier. Revenue rose 4 percent to C$1.33 billion.
Analysts on average had expected a profit of 45 Canadian cents per share, on revenue of C$1.30 billion ($1.24 billion), according to Thomson Reuters I/B/E/S.
Shaw had more shares outstanding in the third quarter than it did in the year-earlier quarter.
Apart from the pressure on its TV businesses, Shaw is facing fierce competition from Telus Corp, which is pushing out an internet-based TV product to lure away its customers.
Shaw added a net 17,719 landline telephone subscribers in the quarter, bringing the total to 1.35 million, and a net 4,157 internet subscribers, bringing the total to 1.88 million.
The company's shares were up 3.22 percent at C$24.71 in early trading on the Toronto Stock Exchange.
($1 = 1.0491 Canadian dollars)
(Reporting by Krithika Krishnamurthy in Bangalore; Editing by Ted Kerr)