(Reuters) – Rogers Communications Inc pulled its 2020 forecast and reported a lower-than-expected profit on Wednesday, as widespread cancellation of sports events hammered ad sales and demand for new routers took a hit due to the lockdowns.
While telecom providers are benefiting from an increase in internet usage by customers stuck at home due to the COVID-19 pandemic, store closures have limited their ability to sell equipment and sign up new customers.
Revenue from Rogers’ wireless segment, its largest business that includes internet service and equipment, slipped 2% to C$2.08 billion in the first quarter as demand dropped due to the virus outbreak and on fewer roaming calls.
The equipment unit reported a 17% fall in sales on fewer device purchases and upgrades by existing customers, the company said.
Canada’s Rogers Communications, which faces stiff competition from rivals BCE Corp and Telus Corp, generated average revenue per user of C$52.85 from its wireless services, compared with C$54.13 a year earlier.
Revenue from Rogers’ media segment, which includes television and radio broadcasting, specialty channels and digital media, fell 12% due to the suspension of major sports matches in March and lower ad sales.
The telecom operator’s revenue for the quarter ended March 31 fell 5% to C$3.42 billion, missing analysts’ estimates of C$3.53 billion, according to IBES data from Refinitiv.
Net income fell to C$352 million, or 68 Canadian cents per share, from C$391 million, or 76 Canadian cents per share, a year earlier.
On an adjusted basis, Rogers earned C$0.71 per share, missing estimates of C$0.80.
The company’s U.S.-listed shares were marginally down in afternoon trading.
(Reporting by Ayanti Bera in Bengaluru; Editing by Shinjini Ganguli and Shounak Dasgupta)