MONTREAL - Cogeco Cable Inc. (TSX:CCA) profit and revenue were up in its third quarter compared with the year-earlier period, but fell short of analyst estimates on both measures.
The Montreal-based company, which operates a cable and telecom system that spans southern Ontario and Quebec, said Thursday its third-quarter profit from continuing operations edged up to $53.2 million or $1.09 per share.
That was five cents per share below a consensus estimate compiled by Thomson Reuters.
Cogeco Cable also lowered its 2012 target for adding primary service units by about 10 per cent, dropping to 72,000 from 80,000, and said its annual revenue for the financial year ending Aug. 31 will be $50 million lower than the previous guidance issued in April. It's now estimated to be $1.28 billion.
During the quarter, Cogeco Cable added 6,246 primary service units for a total of 1.96 million PSUs as of May 31. Revenue in the three months ended May 31 rose to $319.8 million, up 7.2 per cent from $298.2 million a year earlier but $3 million short of analyst estimates.
The cable company also said its free cash flow will be higher ($90 million rather than $85 million) and its profit will be lower ($225 million rather than $235 million) than in the previous guidance.
Cogeco chief executive Louis Gaudet he expects the cable company will still achieve most of its main financial objectives with competitive marketing and cost controls.
"We are satisfied with Cogeco Cable's results for the third quarter of fiscal 2012," Audet said in a statement. "After nine months (of fiscal 2012), we still continue to grow and most of our performance indicators are on target with our objectives."
Even though Cogeco is revising its target for primary service units, Audet said the company is confident that it can improve its 2012 operating income before depreciation and amortization target to $585 million from $580 million.
"These solid results in the third quarter of fiscal 2012 demonstrate that with strong cost controls and a competitive marketing strategy, Cogeco Cable manages to grow and achieves its financial objectives in this highly competitive industry."
Meanwhile corporate parent Cogeco Inc. (TSX:CGO), which is also headed by Audet, said its revenue rose 8.4 per cent to $358 million from $330 million a year before.
Its profit from continuing operations was $55.4 million, or $1.15 per share, up from $54.4 million or $1.13 per share in the third quarter of fiscal 2011.
Both companies also posted overall losses in the third quarter of fiscal 2011, as the cable division wrote off the value of its troubled Portuguese operations, which were later sold..
In addition to owning a controlling stake in the cable company, Cogeco Inc. has a broadcasting division that operates radio stations in Quebec.
Cogeco Inc. provided a preliminary estimate for its 2013 financial year, which begins Sept. 1. It's estimating $1.49 billion of revenue for the 12 months ending Aug. 31, 2013 and $1.41 billion of revenue for the current financial year.
Cogeco shares closed down 49 cents at $44 on the Toronto Stock Exchange, while Cogeco Cable shares closed down 97 cents at $44.86.
with a report from David Paddon in Toronto
