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Rogers Communications Inc. has withdrawn its financial guidance and reported a drop in its first-quarter earnings and revenue after it closed most of its stores, dropped some roaming charges and saw major sports leagues suspended in response to COVID-19.

The financial results reported on Wednesday provide an early glimpse of how the global health crisis could affect Canada’s largest telecom companies even though traffic on their networks has risen sharply as people work, learn and entertain from home.

“With elevating unemployment levels, we anticipate bad debt costs could increase in the second half of the year," Tony Staffieri, the company’s chief financial officer, told analysts during a conference call to discuss results for the three-month period ended March 31.

He said the company is seeing signs that some customers want to reduce their wireless and cable packages to match their new financial realities. "We expect this volume will pick up depending on the depth and duration of the economic downturn, and will ultimately impact recurring ARPUs [average revenue per user] and revenue.”

Uncertainty about how long the pandemic will last prompted the company to withdraw its financial guidance for the rest the year.

“Like most businesses, COVID-19 will have an impact on our financial results in the short term," chief executive Joe Natale said during the company’s annual shareholder meeting, also on Wednesday. “But the current environment does not affect the underlying strength of our company, nor the long-term, sustainable growth of our business,” he added.

Rogers reported revenue of $3.42-billion for the three-month period ended March 31, 5 per cent lower than the $3.59-billion during the same period last year. The reduction stemmed from lower handset sales and a decline in roaming revenues as Rogers suspended fees to help travellers get home.

Its media business also took a hit because of lower advertising and sports revenue, including from the Toronto Blue Jays, as sporting events were suspended in mid-March because of the pandemic. Over all, media revenue declined by 12 per cent to $412-million.

First-quarter net income fell by 10 per cent to $352-million, or 68 cents per share, from $391-million, or 76 cents per share, a year ago.

The company also added fewer postpaid wireless subscribers during the quarter compared with a year ago, as the pandemic caused the market to “essentially halt,” Mr. Staffieri said. (Postpaid subscribers are billed at the end of the month for the services they used, compared with prepaid customers, who pay up front.)

Rogers added 257,000 postpaid wireless subscribers during the quarter, down from 295,000 a year ago, while churn – the monthly rate of customer turnover – declined to 0.93 per cent, from 0.99 per cent. The net result was a loss of 6,000 subscribers, compared with a year ago, when it had a net increase of 23,000 subscribers.

The company said the drop is largely attributable to the fact that Rogers has closed 90 per cent of its retail stores to protect employees and customers from the new coronavirus, and opted to forego competitive offers that would have dawn more people into those that remain open for emergency services. The closings took place during March, typically the busiest sales month of the quarter.

“We don’t view any subscriber metric during this period as being meaningful to any long-term franchise value of our wireless business," Mr. Staffieri said.

Desjardins analyst Maher Yaghi said Rogers relies less on revenue from serving businesses, which is expected to take a hit industry-wide, leaving it well positioned in a postpandemic world.

“However, the media division’s high exposure to sports and wireless overage revenue could be a negative if confinement measures remain in place for a prolonged period,” Mr. Yaghi said in a note to clients.

Rogers shares climbed by 1.2 per cent, or 71 cents, on Wednesday afternoon to $58.15.

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