Quebecor Q3 adjusted earnings beat analyst estimates; non-cash items cause loss

MONTREAL – Quebecor Inc. (TSX:QBR.B) had a $167.8 million net loss in the third quarter but its adjusted earnings were up from last year and better than estimates.

The Montreal-based media and telecom company’s net loss, which was primarily due to a number of non-cash items, amounted to $1.36 per share and compared with a year-earlier profit of 39 cents per share.

On an adjusted basis, which is considered more indicative of the underlying business, Quebecor’s continuing operations earned $63.7 million, which was up from $49.5 million last year

The adjusted earnings from continuing operations amounted to 51 cents per basic share — 10 cents better than estimates and up from 39 cents per share a year earlier.

Revenue was up slightly, rising to $1.07 billion from $1.05 billion.

Quebecor has various businesses including Videotron Ltd., a Quebec-focused cable, phone, Internet and wireless communications provider, and Sun Media, which owns newspapers in several provinces.

Telecommunications accounted for $683.2 million of revenue in the second quarter, up $33.1 million from a year earlier, broadcasting revenue rose $5.1 million to $104.1 million and interactive technologies was essentially flat at $33.9 million.

Offsetting the gains, revenue from news media fell by $19.8 million to $207.8 million and revenue from the leisure and entertainment segment dropped by $2.6 million to $74.8 million.

All of the major segments showed positive operating income, which excludes several items that are included in net income, such as restructuring of operations.

In the latest quarter, Quebecor recorded $14.6 million of items related to restructuring, impairment of assets and other special items, a reduction from $39.7 million a year earlier.

The biggest non-cash item both years was related to an impairment of goodwill and intangible assets, which increased to $305.8 million in the latest quarter from $187.0 million a year earlier.

Quebecor’s B shares gained nearly two per cent in early trading after the report.