Rogers Communications (TSE: RCI.B) beat expectations for its quarterly revenue as it increased subscriptions and benefited from rising demand for its Internet and cloud computing services for remote work.
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Revenue & Earnings
Total revenue came in at C$3.92 billion in the quarter ended December 31, up 6% from C$3.68 a year ago. Cable revenue was stable in Q4 2021, while wireless services revenue grew by 6%. Media revenue increased by 26%, mainly because 2020 was impacted by the postponement of the start of the 2020-21 NHL and NBA seasons.
Q4 2021 profit amounted to C$405 million (C$0.80 per share), down 10% from a profit of C$449 million (C$0.89 per share) in Q4 2020.
On an adjusted basis, Rogers earned C$0.96 per share in the fourth quarter, down 3% from C$0.99 per share a year ago.
The Toronto-based company was expected to earn C$0.95 in adjusted EPS on C$3.86 billion in revenue, according to FactSet.
Rogers added 141,000 wireless postpaid net subscribers, 14,000 new Internet subscribers and 56,000 net Ignite TV subscribers during the quarter.
CEO Commentary
Rogers president and CEO Tony Saffieri said, “We delivered strong results in our fourth quarter, led by accelerating revenue growth and solid net subscriber additions in our Wireless business. This is a critical year for Rogers and the changes we are making to drive a renewed focus on execution, along with strategic investments in our networks and customer experience, should help drive long-term growth and increase shareholder value. We will accelerate the momentum across our business as we come together with Shaw to expand our next-generation networks nationally, offer customers more choice, and enable Canada to thrive in the global digital economy.”
Wall Street’s Take
On January 11, Canaccord Genuity analyst Aravinda Galappatthige kept a Hold rating on RCI.B and set a price target of C$65. This implies 4.4% upside potential.
Overall, the consensus is that RCI.B is a Moderate Buy, based on four Buys and two Holds. The average Rogers Communications price target of C$70.67 implies upside potential of about 14% to current levels.
TipRanks’ Smart Score
RCI.B scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock returns have strong chances to beat the overall market.
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