TORONTO (Reuters) - Rogers Communications Inc (>> Rogers Communications Inc.) took a hit from an abandoned television project but reported better-than-expected adjusted profit on Thursday that sent its shares higher as Canada's largest wireless provider leaned on mobile and internet growth.
The Toronto-based company's outlook for 2017 pointed to better days ahead, but it stood pat on its dividend payout.
The company, controlled by the Rogers family, surprised analysts with the addition of 93,000 net postpaid wireless subscribers in the last three months of 2016, boosting both profit and revenue in its biggest business.
Postpaid customers paid C$7.83 more per month than they did a year ago as the company expanded its use of data plans that can be shared across devices and by multiple users.
Rogers also added 30,000 landline internet and 4,000 landline phone accounts, but lost 13,000 television subscribers.
Its shares jumped 3.5 percent to C$54.44 shortly after the open.
"Good subscriber momentum going into 2017," Desjardins analyst Maher Yaghi wrote in a note. "Time to translate this into earnings."
Rogers took a C$484 million impairment charge, wiping out its net profit, after scrapping development of its own internet-based television product in favor of a product from Comcast Corp (>> Comcast Corporation).
Rogers may struggle to fend off defections to rival BCE Inc (>> BCE Inc.) while waiting to launch the Comcast X1 platform in early 2018.
"We have no doubt it is the right decision for the long-term for Rogers," chairman and interim chief executive Alan Horn said on a call with analysts.
The company held its dividend steady at 48 cents, but suggested it could increase cash returns to shareholders this year.
Joe Natale will join the company as CEO in July, when the former Telus Corp (>> TELUS Corporation) chief's non-compete clause expires.
Rogers pointed to revenue growth of between 3 and 5 percent for 2017, and adjusted operating profit and free cash flow increases of 2 to 4 percent. It hit the bottom end of a 1 to 3 percent profit target in 2016.
Rogers reported a net loss of C$9 million ($6.9 million), or 4 Canadian cents a share, compared to a profit of C$299 million, or 58 Canadian cents a share, a year earlier.
Excluding the TV charge, Rogers earned 74 Canadian cents per share, beating analysts' expectations of 71 Canadian cents, according to Thomson Reuters I/B/E/S, while its revenue of C$3.51 billion missed the average estimate of C$3.56 billion.
(Additional reporting by Ahmed Farhatha in Bengaluru; Editing by Martina D'Couto and Meredith Mazzilli)
By Alastair Sharp