Shaw Communications Communicates Successful Earnings, Drops on Revenue

Shaw Communications SJR is down on Friday after posting successful second quarter earnings, but falling short on revenue. The Calgary-based firm posted EPS of $0.38, matching its Q2 fiscal 2012 performance and topping analysts' expectations of $0.36. Revenue climbed a modest 1.6 percent to $1.24 billion, narrowly missing the Wall Street consensus of $1.26 billion. All figures in this writing are in USD unless noted otherwise. Crashing Back to Earth Revenue in Shaw's satellite segment declined around one percent year-over-year. Meanwhile, its cable and media segments climbed 1.2 and 2.9 percent, respectively. Overall, the telecommunications provider's cable segment continued to represent the lion's share of its revenue, taking in $804.6 million and accounting for 65 percent of total sales. Cutting the Cord Shaw took a significant hit in cable customers during the quarter. It lost 29,829 subscribers, representing 1.4 percent of its base in the segment. This was about 25 percent more than it lost during the first quarter and triple the amount of customers it lost during Q2 2012. The company's satellite segment gained over 1,300 customers during the quarter. However, over the first half of fiscal 2013, this segment posted a net loss of nearly 2,700 subscribers. Meanwhile, its digital phone and Internet segments gained 13,090 and 7,800 customers, respectively. While this is good news for the firm, the pace of customer growth was about one-third and one-fourth of the Q2 2012 pace in the respective segments. ENMAX Acquisition On April 8, Shaw announced an agreement to acquire ENMAX Vision, a subsidiary of ENMAX Corporation that provides high-speed data communications. Shaw will pay approximately $222.5 million under the deal. Shaw Communicates Dividends Shaw has declared a dividend of $0.085 CAD (currently worth $0.084 USD) on its class B non-voting participating shares and $0.084792 CAD (currently worth 0.083752 USD) on its class A participating shares. The mentioned dividends will be paid on June 27, July 30 and August 29 to holders of record as of the close on June 14, July 15 and August 15, respectively. And, the company has declared a dividend of $0.28125 CAD (currently worth $0.27777 USD) on its series A shares, which will be paid on July 2 to shareholders of record as of the close of business on June 14. Modest Growth Forecast While it hasn't offered specific figures, Shaw expects modest revenue growth. That's about what Wall Street expects, as the current consensus is for a 3.4 percent increase. Market Reaction After hovering above $24 for a month, Shaw has dropped into the $23 range. The stock is down around two percent on word of the company's lackluster revenue.