Shaw Communications saw its overall fourth-quarter profit fall by 32 percent, as losses from an abandoned wireless strategy offset gains elsewhere, according to the Calgary-based company’s financial report Thursday.
The cable, Internet and satellite TV provider had $82.5 million in net income, or 18 cents per share, down from $121.6 million or 28 cents per share last year.
The decline for the three months ended Aug. 31 was due to an $83.7 million loss, or 19 cents per share, at Shaw’s discontinued operations.
During the quarter, which ended the company’s 2011 financial year, Shaw decided to retreat from its push into the cell phone business and write down the value of related assets.
“Fiscal 2011 was a year in which we undertook important steps to be more operationally efficient and financially stronger,”Shaw CEO Brad Shaw said.
“I am pleased to report we ended the year meeting all of our financial commitments. Our performance in the fourth quarter was highlighted by solid operating income growth in the cable division and margin improvement.”
Shaw’s revenue was $1.18 billion, up from nearly $938.9 million a year earlier.
Excluding the impact of a one-time regulatory item last year, revenue in the cable division was up nearly six percent in both the quarter and the year, mainly due to a combination of price increases and growth. Fourth-quarter revenue for the division was $784 million.
Shaw’s net income from continuing operations – excluding the cell phone network that was being built – increased to $166.2 million or 37 cents per share from $122.6 million or 28 cents per share.
The company announced on Sept. 1 that it had opted to abandon its plan to use federally licensed radio spectrum to build a network for cell phones and other mobile devices. Instead, it has opted to establish an extensive Wi-Fi network that will let customers use Shaw services outside the home – at coffee shops, shopping malls and other “hotspots.”
“Customers are actively seeking Wi-Fi hotspots to reduce data costs and improve their wireless broadband experience. Shaw will become the first service provider in Canada to deliver secure and reliable wireless broadband through an extensive Wi-Fi network covering thousands of locations,”Brad Shaw said Thursday.
On Wednesday, Shaw announced it had signed a long-term agreement to carry 30 television stations owned by Bell Media, including TSN, TSN2, RDS, Space and Discovery Channel.
Shaw said the move shows large, vertically integrated companies – those that own the means of distribution, as well as the content – can work together and don’t need regulators to intervene in negotiations.
Growing vertical integration in the media sector was at the center of Canadian Radio-television and Telecommunications Commission hearings earlier this year.
The federal regulator issued a decision last month that prevents telecom companies from keeping their television content – including sports and live events – exclusively to themselves on mobile devices.
The CRTC has also said distributors like Bell Canada, Quebecor Media, Rogers Communications and Shaw need to give Canadians more flexibility by next April in choosing channels they want in their TV packages.
Shaw Communications is one of Canada’s second-biggest cable TV operators and also has satellite TV operations. It bought 11 former CanWest TV stations and a group of specialty channels, including Showcase, MovieTime and HGTV, last year for $2 billion.
The company’s B shares traded Thursday at $20.60, down 49 cents or 2.3 percent.