(Reuters) - Shaw Communications Inc’s quarterly profit easily topped analysts’ estimates on Thursday as the Canadian telecom services company’s investments in its wireless business helped more than double subscriber additions.
Shares of the Calgary-based company rose as much as 10.5 percent to a two-month high of C$26.70 and also boosted the Toronto Stock Exchange’s main index.
Shaw has been investing heavily to build its wireless business in a tough market since acquiring Wind Mobile in 2016 and rebranding it as Freedom Mobile.
“Wireless is the single biggest growth opportunity at Shaw,” Chief Executive Officer Bradley Shaw said on a conference call with analysts.
The launch of iPhones across its network in December, a focus on higher-margin data-heavy plans helped Shaw compete better against rivals Telus Corp, BCE Inc and Rogers Communications.
Shaw’s average revenue per user (ARPU) rose more than 5 percent to C$38.43 in its fiscal second quarter ended Feb. 28. A company executive said during the call that subscribers are moving to a new C$50-plus rate plan from a historically lower value rate plan.
Total revenue from the wireless business doubled to C$209 million ($165.9 million) as the company added 93,500 post-paid subscribers, its highest to date.
“This is the inflection point for wireless, and the business has entered a new phase of stronger multi-year growth,” Barclays analyst Phillip Huang said, upgrading the Canadian stock to “overweight” from “equalweight”.
The company said it added 89,702 net subscribers, up from 33,427 a year earlier.
However, Shaw reported a net loss of C$164 million, or a loss of 33 Canadian cents per share, compared with a profit of C$147 million, or 30 Canadian cents per share, a year earlier due to C$417 million in charges related to its voluntary departure and restructuring programs.
In January, the company offered voluntary departure packages to its 6,500 employees. About 3,300 employees accepted the offer, the company said the following month.
Adjusting for the charges, Shaw earned 50 Canadian cents per share, beating the average analyst estimate of 28 Canadian cents, according to Thomson Reuters I/B/E/S.
Revenue rose 12.4 percent to C$1.36 billion.
The company’s U.S.-listed shares were up 8.8 percent at $20.92.
($1 = 1.2598 Canadian dollars)
Reporting by Ahmed Farhatha and Akshara P; Editing by Sriraj Kalluvila