Cogeco Inc. and cable subsidiary report increased revenue and profits

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MONTREAL – Telecommunications and media company Cogeco Inc. (TSX:CGO) and its main subsidiary, Cogeco Cable Inc. (TSX:CCA), are both reporting increased revenue and profits in the second quarter.

Cogeco says it made a profit of $58.5 million, or $1.03 a diluted share, up from $48.9 million, or 87 cents a diluted share, during the same quarter a year ago.

Revenue rose to $518.4 million from $458.5 million.

Meanwhile, Cogeco Cable reports a profit of $60.3 million, or $1.23 a diluted share, compared with $50.8 million, or $1.04 a diluted share, in the year-ago period

Revenue came in at $486 million, up from $429.6 million.

“This quarter we have well demonstrated our ability to grow profitability, with the gain in profit compared to the same period last year, exceeding the comparable gain in revenue. Solid cost management is a strength shared among all of our business units,” Louis Audet, president and CEO of Cogeco Inc., said in a statement.

“In our media business activities, both our radio and out-of-home advertising businesses continue to progress.”

Analysts polled by Thomson Reuters had on average expected Cogeco Cable to report net income of $1.14 per share and adjusted earnings of $1.10 per share on revenue of $477.4 million.

Meanwhile, parent company Cogeco Inc. was expected to earn net income of $1.03 per share and adjusted income of 96 cents per share on revenue of $509.18 million.

Cogeco Cable has said it will look south to increase the size of its cable TV business since few opportunities exist in Canada. The company has said it sees a possible acquisition of a small U.S. cable company later next year, after it pays down more debt.

Cogeco got a toehold in the U.S. market with a US$1.36-billion deal to buy Atlantic Broadband in 2012, its first big acquisition since its failed venture into Portugal.

Atlantic Broadband has operations in Pennsylvania, Florida, Maryland, Delaware and South Carolina and also offers Internet and telephone services to residential and business customers.

While the company waits for an opportunity in the United States, Cogeco has said it will have to grow through the services it offers, including cable TV and expanding business services.

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