Quebecor’s Q2 Profit Down 29%; Shares Fall 5%

Shares of Quebecor (QBR.B) fell 5% Thursday after the company reported a drop in profits in its second quarter, despite increased revenues. The Montreal-based company trades on the Toronto Stock Exchange (TSX), and is a leader in telecommunications, entertainment, culture, and news media services.

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Quebecor’s revenue for Q2 2021 came in at C$1.13 billion, an increase of 12.7% versus the prior-year quarter. The Telecommunications sector posted revenue growth of 6.8% to C$928.4 million, mainly driven by good performance from subsidiaries TVA and Videotron.

Quebecor’s Media revenues increased from C$132.7 million to C$198.2 million. (See Quebecor stock charts on TipRanks)

Meanwhile, net income attributable to shareholders fell C$51.4 million to C$123.5 million (C$0.50 per share) for the three months ended June 30. The company explains the unfavorable variance mainly by the refinancing of its debt and the decrease in profit from discontinued operations.

Adjusted net earnings amounted to C$0.65 per share, up from C$0.57 per share in the second quarter of 2020.

Analysts on average expected Quebecor to report adjusted earnings of C$0.62 per share and C$1.09 billion in revenue.

Quebecor’s president and CEO Pierre Karl Péladeau said, “As the Québec economy recovered, our sustained efforts and disciplined execution on our business strategies yielded a solid performance in the second quarter of 2021, as evidenced by increases of 12.7% in revenues, 5.4% in adjusted EBITDA and 9.2% in the Corporation’s adjusted income from continuing operating activities.

“These excellent results translated into a 3.7% increase in cash flows from operations.”

A week ago, Canaccord Genuity analyst Aravinda Galappatthige reiterated a Hold rating on QBR.B with a C$36 price target. This implies potential upside of 16.6%.

Analysts overall are bullish on QBR.B with a Strong Buy consensus rating, based on three Buys and one Hold. The average Quebecor price target of C$38.50 implies upside potential of 23.4% from current levels.