Cogeco Communications (TSE: CCA), North American eighth-largest cable operator, posted a revenue up 16.1% and a profit up 0.1% in the first quarter of 2022 a result powered by its U.S. subsidiary Breezeline, previously known as Atlantic Broadband.
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Revenue & Earnings
Revenue came in at C$718.5 million in Q1 2022, compared to a revenue of C$618.9 million reported for the prior-year quarter.
Canadian broadband services revenues increased by 8.2%, while American broadband services revenue increased by 31% in constant currency.
Profit for the first quarter amounted to C$116.6 million, of which C$106.8 million (C$2.29 per share), was attributable to owners of the company, compared to C$114.9 million, C$106.7 million (C$2.24 per share), respectively, at the comparable period of fiscal year 2021.
The company declared a quarterly dividend of C$0.705 per share, compared to C$0.64 per share in Q1 2021.
CEO Commentary
Cogeco Communications president and CEO Philippe Jetté said, “Over the past months, Cogeco Connexion has also made good progress in its preparation for the deployment of its network expansion projects in underserved and unserved areas in partnership with governments. In the United States, our broadband business unit had a good first quarter. The integration of our recently acquired Ohio broadband systems is advancing well, according to plan. The team is also progressing well with its major fiber network expansion initiative. More recently, we announced a full rebrand including a new name, Breezeline. The rebrand represents a pledge to an every day customer experience which goes above and beyond expectations.”
Wall Street’s Take
On January 7, RBC Capital analyst Drew Mcreynolds maintained a Buy rating on CCA, with a price target of C$129. This implies 28.5% upside potential.
The rest of the Street is cautiously optimistic about CCA with a Moderate Buy consensus rating, based on three Buys and three Holds.
The average Cogeco Communications price target of C$127.50 implies upside potential of about 27% to current levels.
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