Shaw Communications (SJR) Q1 Earnings Beat, Revenues Rise Y/Y

Shaw Communications SJR reported first-quarter fiscal 2022 adjusted earnings from continuing operations of 31 cents per share, beating the Zacks Consensus Estimate by 3.33%.

Total revenues came in at $1.10 billion, beating the consensus mark by 0.49%.

In domestic currency, Shaw reported earnings of C$0.39 per share, up 25.8% year over year. Total revenues increased 1.2% year over year to C$1.39 billion.

Segmental Update

Wireline revenues (76.3% of total revenues) increased 0.1% on a year-over-year basis to C$1.06 billion. Wireline customers declined by roughly 78,100 in the reported quarter compared with a loss of nearly 100,900 in the year-ago quarter.

Wireline - Consumer revenues decreased 1.6% to C$896 million. Wireline - Business revenues of C$161 million were up 11% year over year.

Wireless revenues (24% of total revenues) increased 4.7% on a year-over-year basis to C$332 million. Shaw added 55,600 new wireless customers in the reported quarter.

Shaw Communications Inc. Price, Consensus and EPS Surprise

Shaw Communications Inc. Price, Consensus and EPS Surprise

Shaw Communications Inc. price-consensus-eps-surprise-chart | Shaw Communications Inc. Quote

Wireless division currently operates in Ontario, Alberta and British Columbia, covering roughly 50% of the Canadian population.

Wireless - Service revenues (72% of total segment revenues) were up 11.2% from the year-ago quarter to C$239 million.

ABPU fell 9.4% year over year to C$38.67. ARPU declined 3.4% from the year-ago quarter to C$36.95.

Wireless - Equipment revenues (28% of total revenues) decreased 8.8% year over year to C$93 million.

Operating Details

Operating, general and administrative expenses declined 1.3% year over year to C$753 million.

In first-quarter fiscal 2022, adjusted EBITDA grew 4.3% year over year to C$633 million. Adjusted EBITDA margin expanded 140 bps on a year-over-year basis to 45.7%.

Segment-wise, Wireline’s adjusted EBITDA decreased 1.5% to C$524 million. The Wireline segment’s adjusted EBITDA margin contracted 80 bps on a year-over-year basis to 49.6%.

Wireless adjusted EBITDA surged 45.3% to C$109 million. The Wireless segment’s adjusted EBITDA margin increased from 34.9% to 45.6%.

Cash Flow Details

As of Nov 30, 2021, Shaw Communications had cash worth $292 million. The company’s net debt position was C$5.67 billion.

Moreover, the company’s net debt leverage ratio was 2.2X, below management’s optimal range of 2.5X-3X.

In the quarter under review, capital expenditures were C$225 million compared with C$227 million in the year-ago quarter.

Free cash flow was C$236 million compared with C$225 million in the year-ago quarter.

Zacks Rank & Stocks to Consider

Shaw Communications currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader consumer discretionary sector include Brunswick BC, Electronic Arts EA and Nexstar Media NXST, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Brunswick, Electronic Arts and Nexstar are scheduled to report their quarterly results on Jan 27, Feb 1 and Feb 22, respectively.

The Zacks Consensus Estimate for Brunswick’s fourth-quarter 2021 earnings is pegged at $1.33 per share, unchanged over the past 60 days.

The consensus mark for EA’s third-quarter fiscal 2022 earnings is pegged at $3.20 per share, down 0.9% over the past 60 days.

The Zacks Consensus Estimate for Nexstar’s fourth-quarter 2021 earnings is pegged at $4.87 per share, unchanged over the past 60 days.

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