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Rogers Communications' (RCI) Q2 Earnings, Revenues Beat

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Rogers Communications (RCI - Free Report) reported second-quarter 2022 adjusted earnings of 68 cents per share, which increased 9.1% year over year and beat the Zacks Consensus Estimate for earnings by 4.69%.

Quarterly revenues of $3.03 billion beat the consensus mark by 3.11%.

In domestic currency (Canadian dollar), adjusted earnings increased 13.2% year over year to C$0.86 per share. Total revenues increased 8% year over year, reaching C$3.86 billion.

Rogers Communication, Inc. Price, Consensus and EPS Surprise

Rogers Communication, Inc. Price, Consensus and EPS Surprise

Rogers Communication, Inc. price-consensus-eps-surprise-chart | Rogers Communication, Inc. Quote

Wireless Details

Wireless (57.2% of total revenues) increased 7.2% from the year-ago quarter’s levels to C$2.21 billion.

Service revenues increased 10.8% to C$1.79 billion, owing to higher roaming revenues associated with increased traveling and a larger postpaid mobile phone subscriber base.

Equipment revenues were down 6% to C$421 million due to fewer device upgrades by existing subscribers and fewer of the new subscribers purchasing devices.

Monthly mobile phone ARPU was C$58.8, up 5.7% year over year, reflecting continued improvements in roaming revenues.

As of Jun 30, 2022, the prepaid subscriber base totaled almost 1.20 million, highlighting an addition of 29K subscribers from the year-ago quarter’s levels. The monthly churn rate was 4.05% compared with 3.75% in the year-ago quarter.

As of Jun 30, 2022, the postpaid wireless subscriber base totaled 9.03 million, up 509K from the year-ago quarter’s levels. The upside can be attributed to strong base management, low postpaid mobile phone churn and increased market activity. The monthly churn rate was 0.68% compared with 0.76% in the year-ago quarter.

Segment operating expenses increased 3.6% from the year-ago quarter’s levels to C$1.09 billion.

Adjusted EBITDA increased 10.9% year over year to C$1.11 billion. Adjusted EBITDA margin expanded 170 basis points (bps) on a year-over-year basis to 50.5%.

Cable Details

Cable revenues (26.9% of total revenues) inched up 2.8% year over year to C$1.04 billion, driven by a modest price increase across Roger’s Internet base introduced in the last quarter. Service revenues rose 2.7% year over year to C$1.03 billion.

As of Jun 30, 2021, the retail Internet subscriber count was nearly 2.27 million, up 101K from the year-ago quarter’s levels.

As of Jun 30, 2022, total Smart Home Monitoring subscribers reached 106K, highlighting a loss of 16K subscribers from the year-ago quarter’s reported figure. Total Home Phone subscriber count was nearly 872K, down 73K from the year-ago quarter’s figure.

Equipment revenues were up 33.3% year over year to C$4 million.

Segment operating expenses remained unchanged year over year at C$521 million.

Adjusted EBITDA increased 5.7% year over year to C$520 million. Adjusted EBITDA margin expanded 140 bps on a year-over-year basis to 50%.

Media Details

Media (17% of total revenues) increased 20.7% from the year-ago quarter to C$659 million due to higher sports-related revenues, including negotiation of certain content rates.

Segment operating expenses increased 5.8% year over year to C$657 million, primarily attributed to higher programming, production costs and other general operating costs.

Consolidated Results

Operating costs increased 3.1% to C$2.27 billion. As a percentage of revenues, operating costs contracted 280 bps to 58.8%.

Adjusted EBITDA increased 15.9% year over year to C$1.59 billion. Adjusted EBITDA margin expanded 280 bps to 41.2%.

Balance Sheet & Cash Flow Details

As of Jun 30, 2022, Rogers Communications had $3.8 billion of available liquidity, including $0.7 billion in cash and cash equivalents and a combined $3.1 billion available under the bank credit facility.

The company had $3.9 billion of available liquidity, including $0.8 billion in cash and cash equivalents and a combined $3.1 billion available under the bank credit facility at the end of the previous quarter.

Cash provided by operating activities increased 29.8% year over year to C$1.31 billion. Free cash flow increased 13.9% year over year to C$344 million.

Rogers Communications paid out C$252 million in dividends in the reported quarter and declared a $0.50 per share dividend on Jul 26, 2022.

The company ended the second quarter with a debt leverage ratio (adjusted net debt/adjusted EBITDA) of 3.2 compared with the previous quarter’s debt leverage ratio of 3.3.

Guidance

For full-year 2022, Roger expects total service revenue growth in the range of 6-8% and adjusted EBITDA growth in the range of 8-10%.

Free cash flow excluding Shaw financing is expected in the range of $1.9-2.1 billion.

Zacks Rank & Stocks to Consider

Rogers Communications currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Consumer Discretionary sector include Sinclair Broadcast Group (SBGI - Free Report) , Nexstar Media Group (NXST - Free Report) and Gray Television (GTN - 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.

Sinclair Broadcast, Nexstar Media Group and Gray Television are scheduled to report their quarterly results on Aug 3, Aug 4, and Aug 5, respectively.

The Zacks Consensus Estimate for Sinclair Broadcast Group’s second-quarter 2022 loss is pegged at $3.35 per share, unchanged over the past 30 days.

The Zacks Consensus Estimate for Nexstar Media Group’s second-quarter 2022 earnings is pegged at $5.46 per share, unchanged over the past 30 days.

The consensus mark for Gray Television’s second-quarter 2022 earnings is pegged at 97 cents per share, unchanged in the past 30 days.