UPDATE 1-Shaw Comms profit slips as cable customers exit
TORONTO, Oct 24 (Reuters) - Shaw Communications Inc , the dominant cable company in Western Canada, said on Thursday its fourth-quarter profit slipped as heightened competition drained away customers, and its shares fell after release of the results.
Calgary, Alberta-based Shaw said it lost almost 30,000 cable-TV subscribers and fewer than 1,000 subscribers from its smaller satellite-TV business.
Shaw is facing fierce competition from telecom company Telus Corp, which offers wireless phone services on top of TV, landline phone and Internet services. Shaw abandoned plans to build a wireless phone network last year, restricting its ability to match Telus in offering discounted packages to customers.
"We expect the environment to remain challenging over the coming year," Chief Executive Brad Shaw said in the earnings release.
Shaw, which also operates Canada's Global TV network, said net income in the quarter declined to C$117 million ($112.62 million), or 24 Canadian cents a share, from C$133 million, or 28 Canadian cents a share, a year earlier.
Revenue rose 3 percent to C$1.25 billion.
Analysts had, on average, expected Shaw to earn 33 Canadian cents a share on revenue of C$1.24 billion, according to Thomson Reuters I/B/E/S.
Shares in the company fell 3 percent to C$24.55 in early trade on the Toronto Stock Exchange.
Shaw's media division, which operates specialty channels such as HGTV Canada, Food Network Canada, History and Showcase, recorded a 6.5 percent jump in revenue as it was able to raise subscriber prices, while advertising sales also increased.
Shaw expects to collect some C$800 million combined from sales of some specialty channels to Corus Entertainment and a cable unit to Rogers Communications Inc . It will spend up to C$500 million of that to improve its networks.
The wireless airwaves that Shaw bought in an auction in 2008 may prove more difficult to dispose of, however, with the federal government making it clear it does not want the spectrum to be taken over by one of the country's three dominant wireless providers. They are Telus, Rogers and BCE Inc.
The company had planned to sell the spectrum, which was set aside by the government for new entrants to the wireless market, to Rogers, Canada's largest wireless company.
Shaw said it expects growth in revenue and adjusted operating income before amortization of between 2 and 4 percent in fiscal 2014.
Shaw added a net 10,564 Internet subscribers in the quarter, bringing the total to 1.89 million, and a net 4,722 landline telephone subscribers for a total of 1.36 million.