By Alastair Sharp
TORONTO, April 12 Shaw Communications Inc
posted a 2 percent rise in second-quarter
profit on Friday and said it expects modest revenue growth for
the rest of the year, as price increases staved off an overall
decline in its customer base.
Shares in Shaw, the dominant cable company in Western
Canada, fell 1 percent in early trade.
Shaw lost almost 30,000 cable subscribers in the quarter, a
sharp escalation of a secular trend, and added just over 13,000
landline telephone accounts. It added 7,800 net new Internet
"Subscriber trends were very worrying," Canaccord Genuity
analyst Dvai Ghose wrote in a note, adding the sharp fall
reflects "our concern that Shaw loses significant subscriber
share when it pursues conservative pricing due to an inferior
cable interface, an aggressive competitor and service issues at
The company is facing fierce competition from phone company
Telus Corp, which is pushing out an Internet-based
television product to win over Shaw's customers.
Shaw said a shortened National Hockey League schedule and
fewer pay-per-view events hurt its ability to attract customers.
But scaling back on promotional activity and raising prices for
its services helped offset that weakness.
Shaw said net income rose to C$182 million, or 38 Canadian
cents per share, from C$178 million, or 38 Canadian cents per
share, a year earlier. The earnings were in line
with analyst expectations, according to Thomson Reuters I/B/E/S.
Revenue at the Calgary-based company rose 2 percent to
C$1.25 billion. The company also said it expects consolidated
free cash flow of about C$550 million in 2013.
Shaw has drawn the attention of Canada's federal government
for its plan to sell wireless spectrum it bought as a new
entrant to mobile telephony in a 2008 auction to Rogers
Communications Inc, a dominant national wireless
Ottawa is eager to support greater competition in the sector
and could yet veto the sale, which also includes an Ontario
cable unit and would otherwise bring in some C$700 million for
Not having a wireless service to offer in bundled packages
for its TV, Internet and landline telephone customers is a
disadvantage in Shaw's battle out west with Telus.
It is not clear whether Shaw intends to bid in another round
of spectrum auctions due to start later this year, after
abandoning its earlier wireless plans.
It said earlier this week it planned to buy a fiber optic
network from city-owned power company Enmax Corp for around
C$225 million to boost its corporate offering.
Shares in the company, controlled by the Shaw family, fell 1
percent to C$24.41 in early trade on Friday, following a similar
fall on Thursday. They have gained roughly 25 percent since