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Winnipeg Free Press - PRINT EDITION
Competition takes $100-M bite out of Shaw
CALGARY -- Shaw Communications Inc. will take a $100-million hit to its cash flow this year after efforts to fend off the competition and softness in the advertising market put pressure on its operations, the company said Friday.
Calgary-based Shaw (TSX:SJR.B) faces an aggressive push from Telus Corp. (TSX:T) in Western Canada, which it says has been snapping up market share through promotions and discounts. Shaw has had to step up its competitive game in response.
"This approach to the competitive environment, including costs associated with staffing, marketing expenditures and the impact of our subscriber activity over the last quarter, has caused financial results to come under pressure," CEO Brad Shaw said on a conference call with analysts. "We view the majority of these expenditures as core investments that provide long-term benefits for our company."
The Internet, satellite and television company now expects free-cash flow -- the money it generates for running the business -- will be $450 million for fiscal 2012, about $100 million less than guidance issued in January.
"We are focused on customer profitability and sustainable growth initiatives, and we are not satisfied with this quarter's financial performance," Shaw said.
Shaw shares fell more than five per cent to $19.63 in afternoon trading on the Toronto Stock Exchange.
For the second quarter, ended Feb. 29, Shaw's profit rose 3.5 per cent as revenue grew at its cable and satellite TV divisions. Net income from continuing operations was $178 million or 38 cents per share.
The Calgary-based company's revenue was up three per cent to $1.23 billion.
-- The Canadian Press
Republished from the Winnipeg Free Press print edition April 14, 2012 B17
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