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Shaw Communications reported third-quarter fiscal 2021 adjusted earnings from continuing operations of 56 cents per share, beating the Zacks Consensus Estimate by 100%.
Total revenues came in at $1.1 billion. In domestic currency, the company reported earnings of C$0.70 per share, up 100% year over year. Moreover, total revenues increased 4.8% to C$1.37 billion.
Segmental Update
Wireline revenues (78.5% of total revenues) increased 1.6% on a year-over-year basis to C$1.08 billion.
Wireline - Consumer revenues increased 1.3% to C$935 million. Wireline - Business revenues of C$145 million were up 3.6% year over year.
Wireless revenues (21.7% of total revenues) increased 18.3% on a year-over-year basis to C$298 million.
Wireless - Service revenues (75.5% of total segment revenues) were up 9.2% from the year-ago quarter to C$225 million.
ABPU fell 8.4% year over year to C$40.56, driven by Shaw’s bundled growth strategy through the acquisition of lower-revenue Shaw Mobile customers. ARPU declined 5.1% from the year-ago quarter to C$36.94.
Wireless - Equipment revenues (24.5% of total revenues) increased 58.7% year over year to C$73 million.
Shaw Communications Inc. Price, Consensus and EPS Surprise
Wireline RGUs declined 36,461 in the reported quarter compared with a loss of roughly 55,293 a year ago.
In the Wireline - Consumer segment, the video cable lost 20,917 subscribers in the three months ended May 31, 2021. Video satellite customer count decreased by 861. Phone lost 15,777 customers. Meanwhile, Shaw Communications’ Internet business gained 1,283 customers in the quarter.
In the Wireline - Business Network Service segment, the video cable gained 29 customers in the reported quarter. However, the company lost 1,302 video-satellite customers. Moreover, Shaw Communications lost 47 phone customers while gaining 1,131 Internet customers.,
In the Wireless Segment, Shaw Communications added 51,008 net RGUs. While the company added 46,604 post-paid subscribers, it gained 4,404 pre-paid customers.
Post-paid churn of 1.07% in the reported quarter was higher than 0.96% in the year-ago quarter.
Operating Details
In third-quarter fiscal 2021, operating, general & administrative expenses increased 4.3% year over year to C$733 million. Operating, general & administrative expenses, as a percentage of revenues, decreased 30 basis points (bps) to 53.3%.
Adjusted EBITDA grew 5.4% year over year to C$642 million. Adjusted EBITDA margin expanded 30 bps on a year-over-year basis to 46.7%.
Segment-wise, Wireline’s adjusted EBITDA increased 3.7% to C$527 million. Wireline segment’s adjusted EBITDA margin expanded 100 bps on a year-over-year basis to 48.8%.
Wireless adjusted EBITDA climbed 13.9% to C$115 million. Wireless segment adjusted EBITDA margin increased 210 bps to 51.1%.
Balance Sheet & Cash Flow Details
As of May 31, 2021, Shaw Communications had cash worth $491 million. Moreover, the company’s net debt position was C$5.83 billion.
Moreover, the company’s net debt leverage ratio was 2.4X, below management’s optimal range of 2.5X-3X.
In the quarter under review, capital expenditures were C$233 million compared with C$265 million in the previous quarter.
Wireline capital spending decreased by C$32 million year over year to C$163 million due to a decrease in success-based capital. Wireless spending decreased by C$3 million year over year to C$70 million.
Free cash flow was C$307 million compared with C$248 million in the previous quarter and $221 million in the year-ago quarter.
Acquisition Details
On Mar 15, Shaw entered into an agreement with Rogers Communication (RCI - Free Report) , per which the latter will acquire all of Shaw’s issued and outstanding Class A and Class B shares in a transaction valued at approximately $26 billion.
Guidance
For fiscal 2021, Shaw Communications still expects to deliver adjusted EBITDA growth on a year-over-year basis. Free cash flow is expected to exceed $800 million.
Zacks Rank & Stocks to Consider
Shaw Communications currently has a Zacks Rank #3 (Hold).
American Outdoor Brands and Netflix are scheduled to report their quarterly results on Jul 15 and Jul 20, respectively.
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You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Shaw Communications (SJR) Q3 Earnings Beat, Revenues Rise Y/Y
Shaw Communications reported third-quarter fiscal 2021 adjusted earnings from continuing operations of 56 cents per share, beating the Zacks Consensus Estimate by 100%.
Total revenues came in at $1.1 billion. In domestic currency, the company reported earnings of C$0.70 per share, up 100% year over year. Moreover, total revenues increased 4.8% to C$1.37 billion.
Segmental Update
Wireline revenues (78.5% of total revenues) increased 1.6% on a year-over-year basis to C$1.08 billion.
Wireline - Consumer revenues increased 1.3% to C$935 million. Wireline - Business revenues of C$145 million were up 3.6% year over year.
Wireless revenues (21.7% of total revenues) increased 18.3% on a year-over-year basis to C$298 million.
Wireless - Service revenues (75.5% of total segment revenues) were up 9.2% from the year-ago quarter to C$225 million.
ABPU fell 8.4% year over year to C$40.56, driven by Shaw’s bundled growth strategy through the acquisition of lower-revenue Shaw Mobile customers. ARPU declined 5.1% from the year-ago quarter to C$36.94.
Wireless - Equipment revenues (24.5% of total revenues) increased 58.7% year over year to C$73 million.
Shaw Communications Inc. Price, Consensus and EPS Surprise
Shaw Communications Inc. price-consensus-eps-surprise-chart | Shaw Communications Inc. Quote
Subscriber/RGU Details
Wireline RGUs declined 36,461 in the reported quarter compared with a loss of roughly 55,293 a year ago.
In the Wireline - Consumer segment, the video cable lost 20,917 subscribers in the three months ended May 31, 2021. Video satellite customer count decreased by 861. Phone lost 15,777 customers. Meanwhile, Shaw Communications’ Internet business gained 1,283 customers in the quarter.
In the Wireline - Business Network Service segment, the video cable gained 29 customers in the reported quarter. However, the company lost 1,302 video-satellite customers. Moreover, Shaw Communications lost 47 phone customers while gaining 1,131 Internet customers.,
In the Wireless Segment, Shaw Communications added 51,008 net RGUs. While the company added 46,604 post-paid subscribers, it gained 4,404 pre-paid customers.
Post-paid churn of 1.07% in the reported quarter was higher than 0.96% in the year-ago quarter.
Operating Details
In third-quarter fiscal 2021, operating, general & administrative expenses increased 4.3% year over year to C$733 million. Operating, general & administrative expenses, as a percentage of revenues, decreased 30 basis points (bps) to 53.3%.
Adjusted EBITDA grew 5.4% year over year to C$642 million. Adjusted EBITDA margin expanded 30 bps on a year-over-year basis to 46.7%.
Segment-wise, Wireline’s adjusted EBITDA increased 3.7% to C$527 million. Wireline segment’s adjusted EBITDA margin expanded 100 bps on a year-over-year basis to 48.8%.
Wireless adjusted EBITDA climbed 13.9% to C$115 million. Wireless segment adjusted EBITDA margin increased 210 bps to 51.1%.
Balance Sheet & Cash Flow Details
As of May 31, 2021, Shaw Communications had cash worth $491 million. Moreover, the company’s net debt position was C$5.83 billion.
Moreover, the company’s net debt leverage ratio was 2.4X, below management’s optimal range of 2.5X-3X.
In the quarter under review, capital expenditures were C$233 million compared with C$265 million in the previous quarter.
Wireline capital spending decreased by C$32 million year over year to C$163 million due to a decrease in success-based capital. Wireless spending decreased by C$3 million year over year to C$70 million.
Free cash flow was C$307 million compared with C$248 million in the previous quarter and $221 million in the year-ago quarter.
Acquisition Details
On Mar 15, Shaw entered into an agreement with Rogers Communication (RCI - Free Report) , per which the latter will acquire all of Shaw’s issued and outstanding Class A and Class B shares in a transaction valued at approximately $26 billion.
Guidance
For fiscal 2021, Shaw Communications still expects to deliver adjusted EBITDA growth on a year-over-year basis. Free cash flow is expected to exceed $800 million.
Zacks Rank & Stocks to Consider
Shaw Communications currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader consumer discretionary sector include American Outdoor Brands (AOUT - Free Report) and Netflix (NFLX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Outdoor Brands and Netflix are scheduled to report their quarterly results on Jul 15 and Jul 20, respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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