Analyst Note
| Matthew Dolgin, CFA |Rogers Communications reported a surprisingly strong third quarter, considering that it was dealing with the fallout of a major network outage in early July. Third-quarter sales and profits were reduced by nonrecurring customer credits that the firm provided in the outage’s wake. However, wireless subscriber additions were superb, indicating the strong third-quarter subscriber results from competitors BCE and Telus resulted from sizable industry growth rather than a share loss for Rogers. Cable subscriber results were weaker than we’d otherwise expect, but we’ve forecast long-term cable market share loss to BCE notwithstanding the network outage. Overall, the third-quarter results reinforce our view that the network outage won’t have a long-term impact on Rogers. We are maintaining our forecast and CAD 70 fair value estimate.