Cogeco Cable Inc. says it's raising most of its financial targets for 2010 as a result of steady performance at its Canadian operations and signs that its European subsidiary is stabilizing after a period of intense competition.
The Montreal-based company, which operates primarily in Quebec and Ontario, says revenue in the first quarter was $317.4-million, which is 6 per cent higher than a year earlier.
Profit was $56.7-million, about half of it from a favourable income tax adjustment.
Excluding that special item, Cogeco's profit would have been $26.9-million, up $3.9-million or 17.2 per cent from $22.9-million in a year earlier.
Cogeco says it's now estimating its full-year profit for 2010 will be $125-million, up from the previous projection of $80-million.
In addition to the bump from a change in Ontario's income tax regime, which went into effect in November, Cogeco is expecting its bottom line will be helped by improvements in its operational performance.
Annual revenue for the fiscal year ending Aug. 31, 2010, is now projected at $1.29-billion - up $40-million from a projected $1.25-billion in Cogeco's previous guidance.
Growth in revenue-generating units (RGUs), a measure of the company's subscriber and customer base, is also expected to be stronger in 2010 than previously forecast.
In the fiscal first quarter ended Nov. 30, Cogeco had just under three million RGUs after 89,785 net additions from its various services, which include basic and digital cable, Internet and phone service.
"Our Canadian operations have grown at a steady pace, as demonstrated by net additions of 63,172 RGU," Cogeco president and CEO Louis Audet said in a statement.
"In our European operations, the first quarter results evidence that our customer base has begun to stabilize as a result of the customer retention and acquisition plans implemented in response to the difficult competitive environment experienced in the prior year."
Cogeco is now expected to reach 150,000 net additions to its customer base, up from its Oct. 29 guidance of 125,000.