TORONTO (Reuters) - Shaw Communications reported a
28 percent jump in quarterly profit Wednesday as it reaped the benefits
of cost cuts, the introduction of faster broadband Internet and higher
prices for cable television.
Shaw said it expects 2011 core operating earnings growth to moderate from a rate of around 7.5 percent last year due to competitive pressures and higher programming costs, but that still suggests a hefty uptick in the current quarter. Its shares gained 1.7 percent in early trade.
Desjardins analyst Maher Yaghi said that while the company’s results and outlook looked good, investors would likely want Shaw to show more proof it can handle the pressure being put on its cable division.
“A resurgent competitor in the marketplace is simply making life more difficult” for Shaw, he said, referring to telecom rival Telus, which launched an Internet-protocol television product called Optik last year that competes in Shaw’s home market in Western Canada.
UBS analyst Phillip Huang noted Shaw is ceding cable market share while reporting strong revenues.
Calgary-based Shaw had net income of C$203 million ($209 million), or 45 Canadian cents a share, on revenue of C$1.28 billion in the three months to May 31.
Analysts had, on average, expected Shaw to earn 42 Canadian cents a share on revenue of C$1.27 billion, according to Thomson Reuters I/B/E/S.
Shaw had a profit of 37 Canadian cents a share in the year-before quarter on revenue of C$943.6 million.
Shaw said it expects 2011 core operating earnings growth to moderate from a rate of around 7.5 percent last year due to competitive pressures and higher programming costs, but that still suggests a hefty uptick in the current quarter. Its shares gained 1.7 percent in early trade.
Desjardins analyst Maher Yaghi said that while the company’s results and outlook looked good, investors would likely want Shaw to show more proof it can handle the pressure being put on its cable division.
“A resurgent competitor in the marketplace is simply making life more difficult” for Shaw, he said, referring to telecom rival Telus, which launched an Internet-protocol television product called Optik last year that competes in Shaw’s home market in Western Canada.
UBS analyst Phillip Huang noted Shaw is ceding cable market share while reporting strong revenues.
Calgary-based Shaw had net income of C$203 million ($209 million), or 45 Canadian cents a share, on revenue of C$1.28 billion in the three months to May 31.
Analysts had, on average, expected Shaw to earn 42 Canadian cents a share on revenue of C$1.27 billion, according to Thomson Reuters I/B/E/S.
Shaw had a profit of 37 Canadian cents a share in the year-before quarter on revenue of C$943.6 million.
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