It has been about a month since the last earnings report for Rogers Communication (RCI). Shares have added about 8.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Rogers Communication due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Rogers Communications Q2 Earnings Beat, Revenues Fall Y/Y

Rogers Communications reported second-quarter 2024 adjusted earnings of 85 cents per share, which beat the Zacks Consensus Estimate by 2.41% and increased 11.8% year over year.

Revenues of $3.72 billion missed the consensus mark by 0.45% and decreased 0.9% year over year.

In domestic currency (Canadian dollar), adjusted earnings increased 13.7% year over year to $1.16 per share. Total revenues increased 0.9% year over year, reaching C$5.09 billion, driven primarily by revenue growth in Wireless and Media businesses.

Wireless Details

Wireless revenues (48.4% of total revenues) increased 1.7% year over year to C$2.46 billion. Service revenues increased 3.5% to C$1.98 billion. Equipment revenues were down 5.2% to C$478 million.

Wireless service revenues benefited from the cumulative impact of growth in the mobile phone subscriber base over the past year. The year-to-date increase was affected by the impact of the Shaw Mobile subscribers acquired through the Shaw Transaction in April 2023. 
Monthly mobile phone ARPU was C$57.24, up 0.8% year over year.

As of Jun 30, 2024, the prepaid subscriber base totaled 1.068 million, reflecting a loss of 172K subscribers against 37K gained in the year-ago quarter. The monthly churn rate was 3.2% compared with 6.33% reported in the year-ago quarter.

As of Jun 30, 2024, the postpaid wireless subscriber base totaled 10.59 million, reflecting net additions of 49K compared with 107K in the year-ago quarter. The monthly churn rate was 1.07% compared with 0.87% in the year-ago quarter.

Segment operating expenses decreased 2.7% year over year to C$1.17 billion.

Adjusted EBITDA increased 6.1% year over year to C$1.29 billion. Adjusted EBITDA margin expanded 210 basis points (bps) on a year-over-year basis to 52.6%.

Cable Details

Cable revenues (38.6% of total revenues) decreased 2.4% year over year to C$1.96 billion.

Service revenues decreased 2.8% year over year to C$1.948 billion. Equipment revenues increased 100% on a year-over-year basis to C$16 million.

As of Jun 30, 2024, the retail Internet subscriber count was nearly 4.214 million, reflecting net loss of 70K against a rise of 2.013 million in the year-ago quarter.

As of Jun 30, 2024, total Smart Home Monitoring subscribers reached 101K, highlighting a rise of 9K subscribers. The total Home Phone subscriber count was nearly 1.563 million, reflecting a loss of 121K customers in the reported quarter.

ARPA was C$139.62, lower than the C$139.68 reported in the year-ago quarter.

Segment operating expenses decreased 14.1% year over year to C$848 million.

Adjusted EBITDA soared 8.8% year over year to C$1.116 billion.

Media Details

Media revenues (14.5% of total revenues) increased 7.3% year over year to C$736 million, primarily attributed to higher sports-related revenues, primarily at the Toronto Blue Jays, partially offset by lower Today's Shopping Choice revenues. 
Segment operating expenses increased 7.9% year over year to C$736 million.

Adjusted EBITDA was zero, which plunged 100% year over year due to higher operating expenses.

Consolidated Results

Operating costs increased 23% to C$2.687 billion. As a percentage of revenues, operating costs contracted 210 bps to 54.8%.

Adjusted EBITDA jumped 6.2% year over year to C$2.32 billion. Adjusted EBITDA margin expanded 230 bps to 45.7%.

Balance Sheet & Cash Flow Details

As of Jun 30, 2024, RCI had C$4.3 billion of available liquidity, including $0.45 billion in cash and cash equivalents and a combined C$3.85 billion available under the bank credit facility.

As of Mar 31, 2024, Rogers Communications had C$4.6 billion of available liquidity, including $0.8 billion in cash and cash equivalents and a combined C$3.8 billion available under the bank credit facility.

The company’s debt leverage ratio decreased to 4.7 times as of Jun 30, 2024, which has remained constant since the previous quarter.

Cash flow from operating activities was C$1.47 billion compared with C$1.18 billion generated in the previous quarter. Free cash flow was C$666 million compared with C$586 million generated in the previous quarter.

Rogers Communications paid dividends worth C$266 million and declared a C$0.50 per share dividend.

Guidance

For 2024, RCI expects total service revenues to grow between 8% and 10%. Adjusted EBITDA is expected to grow in the range of 12-15%.

Capital expenditure is still expected between C$3.80 billion and C$4 billion. Free cash flow is expected in the range of C$2.9-C$3.1 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Rogers Communication has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Rogers Communication has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Rogers Communication belongs to the Zacks Cable Television industry. Another stock from the same industry, Comcast (CMCSA), has gained 3.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Comcast reported revenues of $29.69 billion in the last reported quarter, representing a year-over-year change of -2.7%. EPS of $1.21 for the same period compares with $1.13 a year ago.

For the current quarter, Comcast is expected to post earnings of $1.06 per share, indicating a change of -1.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.2% over the last 30 days.

Comcast has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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