As Rogers Communications Inc.'s new leader prepares to unveil his strategy, the company continues to struggle with limited growth in key businesses, such as wireless and cable.
Chief executive officer Guy Laurence said his travels around the country have given him more clarity around where the Toronto-based telecommunications, cable and media company can improve, as well as the confidence that the business can and will perform better.
"I don't think there's any magic or rocket science needed, it's not about massive mergers and acquisitions or expanding outside Canada," Mr. Laurence said on a company conference call for analysts. "We have the assets ... we just need to make them dance together better than we have done previously."
Rogers profit reached $307-million or 57 cents a share in the first three months of 2014, down from $353-million or 68 cents in the same period last year. On an adjusted basis, profit was $340-million or 66 cents a share. The results missed analysts' expectations for 71 cents.
Across the company, quarterly revenue was relatively flat at $3.02-billion.
Mr. Laurence said the company's results in the fourth quarter weren't up to his standards. He said his experience in the company over the past three months had increased his confidence in the company's ability to perform better.
The former head of Vodafone UK Ltd. said he would meet with the board in the coming weeks to lay out his plan, which will address the five or six key themes he took away from his travels. "[The themes] were consistent from Vancouver to St. John's, and that gave me some comfort we were actually seeing the true picture across the country," he said, adding that an "appetite for change" was the comment he heard most often.
Revenue in the wireless business, which is the company's largest division, declined 2 per cent to $1.73-billion. The company attributed this drop to pricing changes made in the past year.
Rogers has the largest wireless business in the country, but said it added just 2,000 net new postpaid subscribers in the quarter, compared to 32,000 this time last year.
Some analysts following the company said they do not expect a quick turnaround in Rogers' wireless business, which also revamped its roaming and voice packages last year.
"We believe a quick turnaround for the wireless business is unlikely …" JPMorgan analyst Richard Choe wrote in a recent note to clients. "We believe the roaming and voice feature plan changes will continue to weigh on results for the first half of 2014."
Rogers faces heightened competition from other telecom rivals in maturing businesses such as wireless and cable. Companies such as BCE Inc. and Telus Corp. are also adapting to changes such as a shift in the federal wireless code, which decreased the maximum terms for cellphone contracts down to two years from three. Both companies have yet to report their quarterly results.
One bright spot in wireless was the rate of monthly churn, which measures customers leaving the company, fell slightly to 1.2 per cent from 1.22 per cent this time last year. Executives called this "a positive trend going forward."
Rogers deepened its commitment to sports in the quarter by adding a new baseball-focused network and extending its deal with the Canadian Hockey League. All this follows its $5.2-billion mega-deal for rights to National Hockey League games. The company said it is "deep into planning" ways to make the best use of these rights.
The company's media business posted an 8-per-cent revenue increase in the quarter to $367-million, although costs such as $5-million on the Next Issue Canada tablet-based subscription service led the division to another adjusted operating loss.
Meanwhile, revenues from cable were largely unchanged at $860-million. Rogers said this was caused by growth in its Internet business being offset by a drop in television and phone revenue, as some TV subscribers were lost.
The company will face shareholders at its annual meeting in Toronto on Tuesday. Its shares have fallen nearly 8 per cent year to date.