Rogers Communications (RCI.B), one of the largest communications and media groups in Canada, reported second-quarter net income of C$302 million and a 14% revenue increase as the company continues to recover from pandemic restrictions.
Total revenue came in at C$3.58 billion in the quarter ended June 30, an increase of 14% from C$3.16 billion in the second quarter of 2020. Cable and Wireless services revenue grew by 5% and 2%, respectively, in the quarter. Media revenue jumped 84% on higher advertising and Blue Jays revenue due to the resumption of live sports.
Meanwhile, Q2 2021 profit amounted to C$302 million (C$0.60 per share), compared to a profit of C$279 million (C$0.54 per share) in Q2 2020.
On an adjusted basis, Rogers earned C$0.76 per share in the second quarter, up 27% from C$0.60 per share a year ago.
The Toronto-based company, which is in the process of acquiring Shaw Communications (SJR.B), was expected to earn C$0.77 in adjusted EPS on C$3.56 billion in revenue, according to financial data firm Refinitiv.
Rogers added 99,000 new postpaid wireless subscribers, 9,000 new Internet subscribers, and 66,000 net Ignite TV subscribers during the quarter.
Rogers’ President and CEO Joe Natale said, “Our solid performance in the second quarter is a result of strong execution across each of our business units as the economy continues to recover from pandemic lockdowns. We saw our Wireless service revenue return to year-over-year growth and we delivered strong Wireless postpaid subscriber net additions. Our Cable business continued to deliver consistent top- and bottom-line growth and our Sports and Media business is seeing advertising revenue recover. As Canada emerges from the pandemic, our financial position and increased regulatory certainty for facilities-based providers enables us to continue enhancing connectivity to urban, rural, and remote areas across our country at record speed to meet the needs of consumers, businesses, and communities.” (See Rogers Communications stock charts on TipRanks)
Last week Canaccord Genuity analyst Aravinda Galappatthige reiterated a Buy rating on the stock while raising its price target to C$75.00 (from C$71.00). This implies 16.4% upside potential.
Overall, the consensus is that RCI.B is a Strong Buy, based on 4 Buys and 1 Hold. The average Rogers Communications price target of C$74.00 implies upside potential of about 15% to current levels.