Shaw Communications Q3 profit surges on tax liabilities revision and revenue growth

Shaw Communications Q3 profit surges on tax liabilities revision and revenue growth

CALGARY — Shaw Communications Inc. says it had $354 million of net income for the three months ended May 31, compared with $184 million in last year’s fiscal third quarter.

That translated into 70 cents per diluted share, double the profit from a year earlier. Revenue was $1.38 billion, up 4.8 per cent from $1.31 billion in the prior year.

Shaw was expected to earn $169 million or 33 cents per share on $1.35 billion of revenues, according to financial data firm Refinitiv.

The results are from the Calgary company’s latest financial report since Shaw agreed to be purchased by Rogers Communications for $26 billion, subject to federal approvals.

The Rogers-Shaw deal isn’t expected to complete the review process until next year.

Observers have said the most challenging part of the transaction may be competition issues surrounding Shaw’s Freedom Mobile division. The companies say they are confident the deal will be approved.

If the deal succeeds, Toronto-based Rogers would own Canada’s No. 1 and No. 4 wireless businesses, the country’s two largest cable systems and one of Canada’s two direct-to-home satellite services.

“By Shaw and Rogers coming together, the combined entity will have the scale, assets and capabilities to confidently invest billions of dollars that will serve future generations, help to close the digital divide and deliver coast-to-coast 5G service throughout Canada,” stated executive chair and CEO Brad Shaw.

Shaw said the higher quarterly profits were due mainly to an increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and a revision of tax liabilities.

Shaw added about 51,000 new wireless customers generating revenue growth of 9.2 per cent, partially offset by lower average revenue per user.

Wireline revenue increased 1.6 per cent to $1.08 billion, including $20 million from the release of a provision following a CRTC decision on final aggregated third-party internet access service rates.

This report by The Canadian Press was first published June 30, 2021.

Companies in this story: (TSX:SJR.B, TSX:RCI.B)

The Canadian Press