Feeling the full financial impact of the COVID-19 pandemic, Rogers Communications reported double-digit declines in revenues, net income and other key metrics for the second quarter.
Rogers, which is Canada's biggest cable and wireless provider, saw overall revenue for the spring quarter plummet 17% on a year-over-year basis to C$3.16 billion ($2.36 billion), largely driven by 13% and 17% decreases in wireless service and equipment revenue, respectively, and a whopping 50% drop in media revenue. Even more notably, Rogers saw its net income sink 53% on a year-over-year basis to C$279 million ($208 million), primarily because of lower revenue and higher bad debt expenses across its three major cable, wireless and media units.
"We saw notable impacts across all of our businesses as sales and new business activity essentially ground to a halt,'' Rogers President and CEO Joe Natale said during the company's earnings call with analysts early Wednesday morning. "As we expected, our second quarter results reflect the economic pressures we saw in our business as Canadians adapted to the challenges of COVID-19," he noted in a press release accompanying the Q2 earnings report.
But Natale insisted that Rogers' financial picture will start returning to normal as the Canadian economy gradually reopens. "These metrics are COVID-19 specific and do not reflect our underlying fundamentals, nor do they diminish our long-term growth prospects," he said during the conference call.
As in the first quarter, Rogers took the biggest financial hit in its media business, which includes its cable channels and sports teams, particularly baseball's Toronto Blue Jays. With play in all major sports leagues suspended throughout the spring because of the novel coronavirus outbreak, Rogers reported that its media revenues plunged to C$296 million ($221 million) in the second quarter, down from C$591 million ($441 million) a year earlier.
Wireless revenue fell to C$1.93 billion ($1,44 billion), down from c$2.24 billion ($1.67 billion) a year ago, as Canadians stopped travelling overseas and rang up much lower mobile roaming fees. Rogers also sold fewer smartphones because consumers are upgrading handsets at a much slower pace during the pandemic.
Rogers' cable division was the one bright star in the otherwise gloomy earnings report, as the company reported that cable revenues held almost steady at C$966 million ($720 million) in Q2, down just 3% from C$997 million ($743 million) a year earlier. Company officials credited the cable unit's relatively strong performance to their gain of 5,000 broadband and 18,000 Ignite TV subscribers despite significantly reduced promotional activity as Canadians largely huddled around their screens at home during the spring.
We'll have more to say about Rogers' cable and broadband results in a later story today on our sister site, Broadband World News.
Citing the uncertainties caused by the pandemic, Rogers executives said they would not be providing financial guidance for the rest of the year. The company's share price slipped to C$51.44 in morning trading on the Toronto Stock Exchange, down 2.4% on the day.
- Rogers socked by early revenue hit from COVID-19
- COVID-19 crashes into Canada's 5G launch plans
- Shaw sees COVID-19 hit, but not as bad as expected
— Alan Breznick, Cable/Video Practice Leader, Light Reading