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Shaw Communications Inc. (SJR - Analyst Report) declared mixed financial results for the third quarter of fiscal 2013. However, the company raised its guidance for fiscal 2013. Free cash flow for fiscal 2013 is now expected to be $568 million - $577 million. 

GAAP net income from continuing operations was $240.4 million, up 0.8% year over year. Net earnings per share were 50 cents, down 1.9%, but significantly ahead of the Zacks Consensus Estimate of 43 cents. Quarterly total revenue climbed 3.8% year over year to approximately $1,275 million but lagged the Zacks Consensus Estimate of $1,292 million.

Quarterly operating income before amortization was around $562.5 million, up 3.2% year over year. Quarterly operating margin stood at 44.1% compared with 44.4% in the prior-year quarter. In the third quarter of fiscal 2013, Shaw Communications generated around $395.2 million of cash from operations, up 17.4% year over year. Free cash flow in the reported quarter was $169.2 million, down 9.7% year over year.  

At the end of the third quarter of fiscal 2013, Shaw Communications had cash and marketable securities of $345.2 million compared with $435.5 million at the end of fiscal 2012. At the end of the reported quarter, Shaw Communications had $4,630.8 million in outstanding debt compared with $4,908.2 million at the end of fiscal 2012. The debt-to-capitalization ratio at the end of the third quarter of fiscal 2013 was 0.50 compared with 0.54 at the end of fiscal 2012.

Subscribers Statistics

As of May 31, 2013, the Video customer base was 2,069,769, reflecting a net reduction of 26,578 customers from the year-ago quarter. The Internet customer base stood at 1,879,942, reflecting quarterly net addition of 4,157 customers. Digital phone lines were 1,355,238, reflecting a year-over-year net addition of 17,719 lines. The DTH customer base was 904,400, representing a quarterly net reduction of 2,930 customers.

Cable Segment

Quarterly revenues were $793.3 million, up 3.9% year over year. Strong revenue growth was attributed to subscriber addition and rate increases. Quarterly operating income before amortization was $381.7 million, up 5.3% year over year.

Satellite Segment

Quarterly total revenue of $209.6 million was up 3.3% year over year.  The segment’s quarterly operating income before amortization was $69.2 million, down 5.3% from the year-ago quarter.

Media Segment

Quarterly total revenue was $295.2 million, up 4.1% year over year. Operating income before amortization was $111.5 million, up 1.8% year over year.  

Other Stocks to Consider

Shaw Communications, which closely competes with Telus Corp. (TU - Analyst Report),  currently has a Zacks Rank #3 (Hold). Other stocks in the North American cable TV industry, which are doing well include Comcast Corp. (CMCSA - Analyst Report) and Time Warner Cable Inc. (TWC - Analyst Report). Both these stocks carry a Zacks Rank #2 (Buy).

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