Rogers Communication (RCI) Up 8.8% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Rogers Communications reported mixed results for Q2 2024, with adjusted earnings beating estimates while revenues fell slightly year over year. The company has seen a positive stock performance recently, but analysts are cautious about future estimates trending downward [1][2][16]. Financial Performance - Adjusted earnings for Q2 2024 were 85 cents per share, exceeding the Zacks Consensus Estimate by 2.41% and reflecting an 11.8% increase year over year [2]. - Total revenues amounted to $3.72 billion, missing the consensus mark by 0.45% and showing a 0.9% decline year over year [2]. - In Canadian dollars, adjusted earnings rose 13.7% year over year to $1.16 per share, while total revenues increased 0.9% to C$5.09 billion, driven by growth in Wireless and Media segments [3]. Wireless Segment - Wireless revenues, constituting 48.4% of total revenues, increased 1.7% year over year to C$2.46 billion, with service revenues up 3.5% to C$1.98 billion, although equipment revenues fell 5.2% to C$478 million [4]. - The mobile phone subscriber base growth was bolstered by the acquisition of Shaw Mobile subscribers, with monthly ARPU at C$57.24, a 0.8% increase year over year [5]. - As of June 30, 2024, the prepaid subscriber base decreased by 172K to 1.068 million, while the postpaid base grew by 49K to 10.59 million [6]. Cable Segment - Cable revenues, making up 38.6% of total revenues, decreased 2.4% year over year to C$1.96 billion, with service revenues down 2.8% [8]. - The retail Internet subscriber count fell by 70K to nearly 4.214 million, contrasting with a significant increase in the previous year [8]. Media Segment - Media revenues increased 7.3% year over year to C$736 million, primarily due to higher sports-related revenues, although operating expenses rose by 7.9% [11]. Consolidated Results - Operating costs increased by 23% to C$2.687 billion, while adjusted EBITDA rose 6.2% year over year to C$2.32 billion, with an adjusted EBITDA margin expanding to 45.7% [12]. Balance Sheet & Cash Flow - As of June 30, 2024, available liquidity was C$4.3 billion, down from C$4.6 billion in the previous quarter [13]. - The debt leverage ratio remained stable at 4.7 times, with cash flow from operating activities increasing to C$1.47 billion [14]. Guidance - For 2024, the company anticipates total service revenue growth between 8% and 10%, with adjusted EBITDA expected to grow by 12-15% [15]. Industry Context - Rogers Communications operates within the Zacks Cable Television industry, where Comcast reported a revenue decline of 2.7% year over year, indicating challenges within the sector [20].