TORONTO — Quebecor Inc. is in a strong financial position and prepared to invest in its wireless and cable operations, CEO Pierre Karl Peladeau said Wednesday as the company reported its latest fourth-quarter results.
“The corporation now has more than $2.0 billion in available liquidity, placing it in a powerful position in a highly competitive environment,” said Peladeau, who returned to Quebecor early last year after a stint in provincial politics.
Peladeau said Quebecor would continue to invest in its Videotron’s wired and wireless networks and the introduction of a new generation of home cable technology based on Comcast’s X1 platform.
He also said the money would enable Quebecor, a company that the Peladeau family controls, to continuing repurchasing shares of Quebecor Media from the Caisse de depot pension fund.
As for the media division, Peleadeau noted Quebecor is appealing a January regulatory decision on the fees it receives from Bell Canada for distributing the TVA Sports specialty channel to Bell’s home television services.
Quebecor’s media division was one of the few weak spots in results issued Wednesday.
“Revenues were a bit lighter than expected due to media, but solid with respect to Videotron (telecommunications),” CanaccordGenuity analyst Aravinda Galappatthige wrote in a research note.
Quebecor’s overall profit attributable to shareholders was $65.6 million or 27 cents per share for the quarter ended Dec. 31. That was down from $123.3 million or 50 cents per share a year earlier when the Montreal-based company recorded a number of favourable non-operating items.
Adjusted income from continuing operating activities for the quarter totalled $78.7 million or 33 cents per share in the quarter, down from $84.7 million or 35 cents per share a year earlier. Analysts on average had expected an adjusted profit of 37 cents per share.
Fourth-quarter revenue totalled $1.06 billion, up from $1.05 billion — slightly below a consensus estimate of $1.08 billion.
Desjardins Capital Markets analyst Maher Yaghi also noted the weakness in media revenue, but added that the division’s earnings were in line with his estimates after adjusting for changes in financial reporting.
As for the Videotron wireless business, Yaghi wrote the 33,700 net additions reported Wednesday were above the consensus estimate of 28,500.
“QBR’s continued strength in wireless is in line with the general strength in the Canadian wireless market in 4Q17, but we are pleased to see this excellent performance after BCE reported very strong net additions in the same quarter,” Yaghi wrote.
Analyst Drew McReynolds of RBC Dominion Securities Inc. wrote that wireless revenue was up 18 per cent from last year and internet was up 5.9 per cent. That was partly offset by a 1.1 per cent decline in Videotron’s cable revenue and a 7.6 per cent drop in home-phone revenue, he wrote.
For the full year, Quebecor earned a profit attributable to shareholders of $369.7 million or $1.53 per share in 2017, up from $194.7 million or 80 cents per share in 2016. Revenue totalled $4.12 billion, up from $4.02 billion.
The year included significant cash inflows and gains from the sale of wireless spectrum licences outside of Quebec — to Shaw Communications Inc in Alberta and Rogers Communications Inc. in the Toronto area.
Companies in this story: (TSX:QBR.B)
David Paddon, The Canadian Press