Rogers Communications Q2 profit cut by more than half due to COVID-19

Rogers Communications Q2 profit cut by more than half due to COVID-19
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TORONTO — Rogers Communications Inc. missed analyst expectations Wednesday as its net profit and adjusted earnings were cut in half in the second quarter with a 17 per cent drop in revenues.

The Toronto-based telecom company earned $279 million or 54 cents per diluted share, down from $591 million or $1.15 per share a year earlier.

Adjusted net income was $310 million or 60 cents per share for the period ended June 30, compared with $597 million or 48 cents per share in the second quarter of 2019.

Revenue was $3.15 billion, down from $3.78 billion a year earlier.

Rogers was expected to report 71 cents per share in adjusted profits on $3.18 billion of revenues, according to financial markets data firm Refinitiv.

Chief executive Joe Natale told analysts on a quarterly conference call that all parts of the business were affected by the COVID-19 pandemic, especially its Blue Jays sports team and media unit.

“But as we said last quarter, these metrics are COVID-19 specific and do not reflect our underlying fundamentals nor do they diminish our long-term growth prospects,” Natale said.

In fact, he said, the extreme conditions allowed Rogers to re-examine its business operations and capital investments to improve efficiency.

“We are doing things today that we thought would take many months or quarters to accomplish, and the business will be stronger as these changes become permanent modes of operating,” Natale said.

Looking forward, the company didn’t issue full financial guidance due to the unpredictable environment but did provide some indications of what may be ahead.

“In general, we anticipate modest sequential financial and operating improvements in Q3 for each of our businesses as the economy starts to open up and live sports slowly resume,” said Tony Staffieri, the company’s chief financial officer.

“We do not know what back-to-school will look like as customers are only now slowly getting back to shopping, but the economy is opening up, and that should help in our and the industry’s recovery.”

This report by The Canadian Press was first published July 22, 2020.

Companies in this story: (TSX:RCI.B).

David Paddon, The Canadian Press

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