A month has gone by since the last earnings report for Rogers Communication (RCI Quick QuoteRCI - Free Report) . Shares have added about 2.6% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.

Rogers Communications Q1 Earnings Beat, Revenues Rise Y/Y

Rogers Communications reported first-quarter 2024 adjusted earnings of 73 cents per share, which beat the Zacks Consensus Estimate by 1.39% but decreased 9.9% year over year.

Revenues of $3.6 billion missed the consensus mark by 0.05% but jumped 28.2% year over year.

In domestic currency (Canadian dollar), adjusted earnings decreased 9.2% year over year to 99 cents per share. Total revenues increased 27.8% year over year, reaching C$4.9 billion, driven primarily by revenue growth in Wireless and Cable businesses.

Wireless Details

Wireless revenues (51.6% of total revenues) increased 7.8% year over year to C$2.53 billion. Service revenues increased 8.7% to C$1.99 billion. Equipment revenues were up 4.3% to C$532 million.

Wireless service revenues benefited from growth in the mobile phone subscriber base, revenues from Shaw Mobile subscribers acquired through the Shaw transaction (completed on Apr 3, 2023) and the positive impact of the July 2022 network outage-related credits.

Monthly mobile phone ARPU was C$58.06, up 1.4% year over year.

As of Mar 31, 2024, the prepaid subscriber base totaled 1.018 million, reflecting a loss of 37K subscribers compared with 8K lost in the year-ago quarter. The monthly churn rate was 3.9% compared with 5.96% reported in the year-ago quarter.

As of Mar 31, 2024, the postpaid wireless subscriber base totaled 10.48 million, reflecting net additions of 98K compared with 95K in the year-ago quarter. The monthly churn rate was 1.08% compared with 0.79% in the year-ago quarter.

Segment operating expenses increased 6.6% year over year to C$1.24 billion.

Adjusted EBITDA increased 8.9% year over year to C$1.28 billion. Adjusted EBITDA margin expanded 50 basis points (bps) on a year-over-year basis to 50.8%.

Cable Details

Cable revenues (40% of total revenues) surged 92.6% year over year to C$1.96 billion.

Service revenues jumped 93.5% year over year to C$1.947 billion. Equipment revenues increased 9.1% on a year-over-year basis to C$12 million.

As of Mar 31, 2024, the retail Internet subscriber count was nearly 4.188 million, reflecting net additions of 26K compared with 14K in the year-ago quarter.

As of Mar 31, 2024, total Smart Home Monitoring subscribers reached 88K, highlighting a loss of 1K subscribers. The total Home Phone subscriber count was nearly 1.594 million, reflecting a loss of 35K customers in the reported quarter.

ARPA was C$140.1, higher than the C$129.58 reported in the year-ago quarter.

Segment operating expenses surged 86.7% year over year to C$859 million.

Adjusted EBITDA soared 97.5% year over year to C$1.1 billion.

Media Details

Media revenues (9.8% of total revenues) decreased 5.1% year over year to C$479 million, primarily attributed to lower subscriber revenues due to the negotiation of certain content rates in the prior year.

Segment operating expenses decreased 5.1% year over year to C$479 million.

Adjusted EBITDA was negative C$103 million, which plunged 171.1% year over year due to lower revenues.

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 34.1% year over year to C$2.21 billion. Adjusted EBITDA margin expanded 210 bps to 45.2%.

Balance Sheet & Cash Flow Details

As of Mar 31, 2024, RCI 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.

As of Dec 31, 2023, Rogers Communications had C$5.9 billion of available liquidity, including $0.8 billion in cash and cash equivalents and a combined C$5.1 billion available under the bank credit facility.

The company’s debt leverage ratio decreased to 4.7 times as of Mar 31, 2024, which has remained constant since the previous quarter.

Cash flow from operating activities was C$1.18 billion compared with C$1.37 billion generated in the previous quarter. Free cash flow was C$586 million compared with C$823 million generated in the previous quarter.

Rogers Communications paid dividends worth C$265 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?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Rogers Communication has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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 indicates a downward shift. Notably, Rogers Communication has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.