Quebecor’s headquarters is seen Monday, October 6, 2014 in Montreal.Ryan Remiorz/The Canadian Press
Quebecor Inc. reported better-than-expected third-quarter financial results as the company's wireless business surged past the one-million subscriber mark.
The Montreal-based telecommunications and media conglomerate reported a swing from a loss last year to a $171.9-million profit in the quarter this year, or $1.42 a share. That was aided by its $430-million sale of spectrum licences to Shaw Communications Inc., which led to a $243.1-million gain that was recognized in the quarter.
Manon Brouillette, chief executive of the company's telecom division, Videotron Ltd., said growth continues to come from services based on data usage, calling wireless the "primary driver of our leading performance."
Videotron added 37,000 mobile customers in the third quarter and said on Wednesday it now has a total of one million wireless customers. It has a market share of about 15 per cent in Quebec.
Quebecor's revenue was up 3.6 per cent to $1.03-billion while adjusted income from continuing operations increased by 14.4 per cent to $97.2-million, or 81 cents a share. The telecom division accounted for $822-million in sales, up 3.8 per cent, while the media unit had revenue of $232-million, up 4.5 per cent.
Even though most of the growth comes from wireless and internet subscribers, analysts noted that the media division reported a 33-per-cent surge in adjusted operating income to $46-million, helping to increase Quebecor's overall adjusted operating income by 8 per cent to $421-million.
The company said that performance was due to better subscription revenue from Quebecor's TVA broadcasting business as well as MELS Studios. In contrast, it said it recorded a $30-million writedown in goodwill related to its stable of more than 60 magazines, citing the "downtrend in the industry's advertising revenues."
Pierre Karl Péladeau, who returned to the role of CEO in February after a stint in provincial politics as Leader of the Parti Québécois, appears to be taking a more active role in the company's media business, which is highly influential in Quebec.
The company said in its earnings report that "music, newspaper, book publishing, out of home [advertising] and printing operations now report" to Mr. Péladeau.