CALGARY — A $284-million impairment charge related to its stake in Corus Entertainment Inc. resulted in a third-quarter loss for Shaw Communications Inc., but the company remains on track to achieve its key 2018 financial goals, Shaw said Thursday.
The Calgary-based cable, internet and wireless company said its net loss for the quarter ended May 31 was $91 million or 18 cents per share, which contrasted with a year-earlier profit of $133 million or 27 cents per share.
Shaw stock was down slightly in early trading at the Toronto Stock Exchange, trading at $27.23 — compared with $27.74 at the previous close.
The company generated $1.3 billion of revenue in the quarter ended May 31, up from $1.22 billion a year earlier, with the growth coming from its wireless, residential internet and business wireline products and services.
Its Freedom Mobile wireless division added 54,000 postpaid subscribers — a key metric for telecom companies — and ended the quarter with a total of 1.32 million pre-paid and post-paid wireless subscribers as of May 31.
“While the distribution and network improvements that we have made, and continue to make, provide significant benefits to customers today, we are also making decisions that reflect our long-term view regarding new technology that is on the horizon,” chief executive Brad Shaw said in a statement.
He said that Shaw is well-positioned to acquire additional spectrum licences for use in a fifth-generation wireless network, which is expected to carry more traffic at faster speeds than current technology.
He added that its partnership with Comcast — a U.S. cable giant that has developed the X1 platform for in-home cable services — is being rolled out by Shaw under the BlueSky brand.
Shaw’s wireless revenue for the quarter was $237 million, up 54 per cent from a year earlier, due to a combination of equipment sales and service revenue.
Revenue from Shaw’s consumer wireline business — which includes Western Canada’s biggest cable TV network — was down slightly at $923 million, as declines in video and phone services offset a gain in internet.
Revenue from Shaw’s business wireline unit increased six per cent to $141 million.
The founding Shaw family controls both companies through class A voting shares but Corus had been completely separate from Shaw Communications from late 1999 until early 2016, when the Shaw Media deal closed.
Shaw Communications acquired nearly 71.4 million Corus non-voting shares, representing 37 per cent of the Toronto company’s equity, when it sold Shaw Media, but the number had grown to 80.6 million shares or 38 per cent of the total as of May 31 as a result of investing dividends in additional Corus stock.
The cash from Corus helped Shaw purchase the former Wind Mobile, now called Freedom Mobile — Canada’s fourth-largest wireless carrier.
Corus stock closed near an all-time low on Wednesday after it announced a 79 per cent cut to its annual dividend, and took a $1-billion impairment charge on its television assets.
Companies in this story: (TSX:SJR.B ,TSX:CJR.B)
The Canadian Press