23-07-2025
Rogers raises service revenue guidance, records steep profit decline in second quarter
Rogers Communications Inc. (RCI-B-T) raised its guidance for service revenue this year and said it would spend at the bottom of its estimated capital expenditure range in 2025, even as subscriber growth and profit declined steeply during the telecom's second quarter.
Rogers reported $4.4-billion of service revenue during the three-month period ended March. 31, up 2 per cent from last year. It raised its expectations for service revenue for the year to between 3 and 5 per cent growth, up from an initial estimate of flat to 3 per cent growth.
Total revenue was $5.2-billion, meeting analyst consensus.
Net income was $148-million, down 62 per cent, primarily as a result of higher restructuring, acquisition and other costs.
The company said it is now expecting to spend $3.8-billion in 2025, compared to an initial estimated range of between $3.8-billion to $4-billion, provided in January.
Rogers added 35,000 postpaid wireless subscribers, beating analyst consensus expectations of 31,000 and sharply down 77 per cent from last year.
The company added 26,000 prepaid phone subscribers, beating consensus of 22,000, down 26 per cent from last year.
During a call with analysts Wednesday morning, Rogers chief executive officer Tony Staffieri acknowledged that 'the size of the net add market is lower than last year,' and said these numbers are in part the result of slowing immigration following federal target cuts and fewer student visas.
Historically, Rogers has won the greatest share of new Canadian subscribers, making it particularly vulnerable to the slowing population growth.
Bank of Nova Scotia analyst Maher Yaghi called the results 'broadly in line with expectations,' and said the customer loading numbers were 'relatively healthy' given continued pressure on the Canadian telecom industry and slower population growth.
'While financial results do clearly show the impact from significant pricing pressures we believe recent price ups which we saw since early June provide a more positive backdrop for the industry,' he said.
Rogers closed its $6.7-billion structured equity deal with Blackstone Inc. for a portion of its backhaul network during the quarter. Previously, Rogers had said the deal was worth $7-billion. It attributed the discrepancy of $300-million to shifting exchange rates.
The company had long-term debt of $39.8-billion as of July 23, down from $42.2-billion at the end of March. Following the Blackstone deal and after the end of the quarter, in July Rogers launched cash offers to repurchase up to US$1.7-billion and $1.2-billion of senior notes.
Media revenue was $808-million, up 10 per cent from last year primarily as a result of higher sports-related revenue due to the success of the NHL playoffs.
Last quarter, Rogers said it was in active talks with investors interested in its sports assets, as the company seeks to unlock value from its portfolio of sports holdings and boost its share price.
The company closed its $4.7-billion acquisition of a portion of Maple Leaf Sports & Entertainment on July 1, one day after the end of the quarter.
Rogers chief financial officer Glenn Brandt said that the company's sports assets, including the Toronto Blue Jays and the portion of Maple Leaf Sports & Entertainment recently acquired from BCE Inc., are worth about $15-billion.
In July, after the end of the quarter, the company ended its contract with third-party customer service provider Foundever. Employment Law firm Samfiru Tumarkin LLP estimated this would affect approximately 900 jobs. Rogers attributed the move to a change of its 'vendor mix.'
Second-quarter profit amounted to 29 cents per share, down from 74 cents per share in the same period of 2024.
In recent weeks, Rogers increased its connection fee from $75 to $80, added new travel passes for 14- or 30-day periods and announced an upcoming daily roaming fee price increase of $2 per day.
