Cogeco Cable Q4 profit slips; loses 10k Canadian subscribers
TORONTO, Oct 31 (Reuters) - Cogeco Cable Inc reported a 4 percent drop in fourth-quarter profit after costs to integrate two recent acquisitions and the loss of cable and telephone customers.
The Montreal-based company, the primary unit of media and telecommunications company Cogeco Inc, said late Wednesday its profit fell to C$43.9 million in the quarter, or 90 Canadian cents a share, from C$45.7 million, or 93 Canadian cents a share, a year ago.
Revenue jumped almost 45 percent to C$470.4 million.
Analysts, on average, expected Cogeco Cable to earn C$1.02 a share on revenue of C$471.1 million, according to Thomson Reuters I/B/E/S.
Cogeco offers cable television and Internet and phone services mostly in rural Ontario and Quebec, and competes with bigger rivals BCE Inc and Quebecor Inc.
The Canadian government served notice this month that cable and satellite TV distributors will have to make it easier for customers to buy smaller bundles of channels, which could put pressure on Cogeco.
It bought U.S. cable company Atlantic Broadband and Peer 1 data centers earlier this year, and said both units performed in line with expectations.
The Atlantic Broadband subsidiary gives Cogeco operations in western Pennsylvania, South Florida, Maryland, Delaware and South Carolina.
The company lost more than 10,000 cable TV customers in Canada and another 3,600 in the United States, while more than 1,600 Canadian telephone customers and 500 U.S. customers also canceled their service in the quarter.
"While cable subscriber results are a concern, investors should not ignore strong (free cash flow) generation and enticing valuation," Canaccord Genuity analyst Dvai Ghose wrote in a note to clients.
Cogeco said free cash flow jumped to C$53.6 million from C$2.6 million.
Ghose said the company has the lowest enterprise valuation to earnings multiple and highest cash flow yield of any cable and telecom company in Canada.