Zacks_Analysts' Blog : Shaw Communications In Line - Analyst Blog

Shaw Communications Inc. (SJR) barely achieved the Zacks Consensus Estimate in its second quarter of fiscal 2010. Quarterly revenue of around $923 million was up 10.7% year over year and also above the Zacks Consensus Estimate of $917 million. The year-over-year improvement was primarily due to customer growth and rate increases.

Quarterly net income was $137.7 million or 32 cents per share compared to a net income of $155.5 million or 36 cents per share in the prior-year quarter. The second-quarter EPS of 32 cents was in line with the Zacks Consensus Estimate.

Operating income before amortization was $422 million, up 11.3% year over year. However, excluding CRTC Part II fee recovery, operating income before amortization increased 10%. In the reported quarter, Shaw Communications generated $377 million of cash from operations compared to $395 million in the year-ago quarter. Free cash flow (cash flow from operations less capital expenditures) in the same quarter was $177.6 million compared to $167.7 million in the year-ago quarter.

At the end of the second quarter of fiscal 2010, the company had $829.4 million of cash & marketable and $3,952.2 million of outstanding debt on its balance sheet, compared to $643.4 million of cash & marketable securities and $3,128.4 million of outstanding debt at the end of fiscal 2009.

Subscribers Statistics

At the end of the second quarter of fiscal 2010, Basic Cable customer base was 2,328,557, net year-over-year reduction of 1,055. Digital customer base was 1,508,587, net year-over-year addition of 98,544. Internet customer base was 1,771,312, net year-over-year addition of 26,735. Digital phone lines were 978,287, net year-over-year addition of 54,922. DTH customer base was 903,109, net year-over-year addition of 1,071.

Cable Segment

Quarterly revenue of little over $727.1 million was up 12.7% year over year. Operating income before amortization was $352.8 million, up 13.3% year over year.

Satellite Segment

Revenue of $195.5 million for the quarter was up 3.9% year over year. Operating income before amortization was $69 million, up 1.8% year over year.

Future Outlook

Management predicted that full fiscal 2010 operating income before amortization may increase by more than 14% year over year. Free cash flow will remains same to that of fiscal 2009. Management also declared that the company will try to enter into the Canadian wireless services market in 2010.