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Cogeco raises payout as quarterly profit falls

File photo of Cogeco president and CEO Louis Audet.

Paul Chiasson/The Canadian Press

Cogeco Inc. has raised its quarterly dividend by a penny to 19 cents per share despite a drop in second-quarter earnings compared with a year ago.

The cable company and radio broadcaster also lowered its earnings guidance for its 2013 financial year to a profit of $69-million attributable to owners of the corporation, down from an earlier estimate of $75-million.

However, revenue is expected to grow to $1.84-billion from the January estimate of $1.73-billion The revised guidance came as the company said profit attributable to owners of the corporation amounted to $16.9-million or $1 per diluted share for the quarter ended Feb. 28, down from $25.1-million or $1.49 per share a year ago.

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Revenue in the quarter grew 32.7 per cent to $458.5-million.

The company's cable subsidiary, Cogeco Cable Inc., reported a profit of $58.7-million or $1.19 per diluted share for the quarter, down from $83.1-million or $1.70 per diluted share a year ago.

Revenue grew to $429.7-million, up from $317.7-million.

The company attributed the increase in revenue to Cogeco Cable's deal to buy Atlantic Broadband cable company last summer for US$1.36-billion and the recently closed purchase of Peer 1 Network Enterprises, a Canadian Internet infrastructure provider, for $526-million.

In its outlook, Cogeco Cable said it expected profit for the year to come in at $205-million compared with earlier expectations of $225-million, as operating margins are expected to slip to 45.2 per cent from 46.2 per cent.

Revenue at Cogeco Cable is expected to increase to nearly $1.7-billion, up from $1.6-billion.

"We are satisfied with the favourable results obtained for the second quarter of fiscal 2013," said Cogeco president and CEO Louis Audet.

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"The cable subsidiary continues along a path of steady growth, both organic and through acquisition. I am confident in this subsidiary's ongoing ability to perform and contribute favourably to Cogeco's objectives."

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