MONTREAL _ Consumer demand for high-speed data services drove much of Quebecor’s growth in the third quarter, but its conventional and specialty TV services also showed progress with advertisers, company executives told analysts Thursday.
The Montreal-based telecom and media company (TSX:QBR.B), which is parent of the Videotron wireless, internet, and cable television businesses, had $1.03 billion in revenue during the three months ended Sept. 30.
Telecommunications accounted for more than three-quarters of Quebecor’s total revenue, rising 3.8 per cent from a year ago to $823.7 million, with average revenue per user up $9.88 or seven per cent to $156.46.
Videotron added 37,000 mobile phone customers, 27,000 internet subscribers and 9,800 members to its Club illico streaming content service during the three months ended Sept. 30, partly offset by a decline in basic cable subscriptions.
Manon Brouillette, Videotron’s president and chief executive officer, told analysts that average revenue per user, or ARPU, is being driven higher by the data required to surf the internet with both wired and wireless devices.
“We certainly know that internet is the key to increasing ARPU and consumers have to pay for data because it costs money on the network,” Brouillette said.
Pierre Karl Peladeau, chief executive of Quebecor and its controlling shareholder, said he was “very enthusiastic” about Quebecor’s market position and its financial flexibility, which amounted to $2 billion in liquid assets at Sept. 30.
“All of these can only be drivers of increasing returns for our shareholders and our various stakeholders,” Peladeau said.
Peladeau was asked during the call how Quebecor would spend its cash _ but he only said “it opened for us many opportunities, which we will keep quiet on.”
Quebecor’s media division _ which includes the TVA television network, newspapers and book publishing _ increased revenue by 4.5 per cent to $231.6 million.
Broadcasting revenue was up six per cent, supported by advertising at its TVA conventional television network and a combination of advertising and subscription revenue growth at the specialty TV channels.
But there was a decline in magazine revenue _ which fell 16 per cent to $25 million, mostly due to lower advertising sales _ and newspaper revenue, which fell four per cent to $45 million.
During the third quarter, Quebecor saw a $243.1-million gain on the sale of seven wireless spectrum licences outside Quebec to Calgary-based Shaw Communications Inc. (TSX:SJR.B) for use in its Freedom Mobile network.
The spectrum sale helped push Quebecor’s net income for shareholders to $171.9 million, or $1.42 per basic share. Another factor was the $31.3-million increase in Quebecor’s adjusted operating income, and other items.
Those positives were partly offset by a $26.3 million increase in income tax expense, a $5.5 million unusual expense related to the settlement of a legal dispute and other items.
The profit amounted to $1.42 per share for the quarter and compared with a loss attributable to shareholders of $8.3 million or seven cents per share a year ago.
Adjusted income from continuing operating activities totalled $97.2 million or 81 cents per share, up from $83.2 million or 68 cents per share in the same period of 2016.
The company announced Wednesday that its shares will be split two-for-one, meaning there were will twice as many class A and B shares outstanding but each will be worth about half as much on Nov. 16 as they are on Nov. 15.