Rogers Reports Strong Q2 2022 Earnings Following Outage, Delays Shaw Merger Deadline Anew

Rogers Communications (TSX: RCI.B) announced this morning its financial results for the second quarter 2022. The report is highlighted by a quarterly total revenue of $3.87 billion, up from Q2 2021’s $3.58 billion and beating the estimate by $80 million.

Breaking down the topline revenue figure, wireless revenue contributed $2.21 billion, cable revenue contributed $1.04 billion, and media revenue added $659 million.

“Our performance in Q2 reflects the incredible hard work by our Wireless, Cable, and Media teams as we continue to recover from the impacts of the pandemic,” said CEO Tony Staffieri. He further added that the firm will work hard to “regain the trust of [its] customers following [the] recent network outage.”

Related to the service interruption, the telco giant is estimating the credits given to customers as compensation will cost around $150 million and will reflect on the firm’s Q3 2022 earnings.

Nevertheless, the strength of Q2 2022 results also “lay a solid foundation” for the pending Rogers-Shaw merger, which continues to face resistance from the Competition Bureau.

“Rogers, Shaw, and Quebecor have put together a remedy that will create a strong and sustainable fourth carrier with proven operations that reach more than 87% of the Canadian population,” Staffieri added. The two Canadian telcos have agreed to extend the outside date for the transaction to December 31, 2022, which can be further extended for one more month “at the option of Rogers or Shaw.”

Further down, the firm then ended the quarter with $409 million in net income, up from $302 million last year. Calibrating for financial items, adjusted EBITDA for Q2 2022 came in at $1.59 billion, up from $1.37 billion in the previous year.

The bottomline figure translates to $0.76 earnings per diluted share. On an adjusted basis, it goes up to $0.86 earnings per diluted share–also beating the estimate of $0.85 per share.

The firm also ended the quarter with $665 million in cash and cash equivalents. Current assets ended at $18.71 billion while current liabilities ended at $7.53 billion.

Free cash flow for the year increased to $344 million compared to last year’s $302 million. The company estimates generating free cash flow in 2022 at around $1.8 – $2.0 billion. For the first six months of the year, free cash flow stood at $859 million.

The communications company also reaffirmed the previously announced topline guidances for 2022, headlined by an increase of 4%-6% in total service revenue and 6%-8% in adjusted EBITDA based on its 2021 numbers. The estimated capital expenditures next year is $2.80 – $3.00 billion compared to its 2021 total capex of $2.79 billion.

Rogers Communications Class B Shares last traded at $59.83 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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