Rogers Communications: Q4 Earnings Beat Expectations, 2025 EBITDA Growth Up to 3%

Rogers Communications Inc. (RCI) has reported its fourth-quarter earnings, beating analysts' expectations and providing an outlook for 2025. The Canadian telecommunications giant reported adjusted earnings per share (EPS) of C$1.46, surpassing the consensus estimate of C$1.36. Quarterly sales came in at C$5.48 billion, slightly above the projected C$5.39 billion.



Rogers' wireless service revenue increased by 2% this quarter, driven by growth in its mobile phone subscriber base and an increase in subscribers purchasing higher-value devices. Cable service revenue remained stable, improving sequentially from the third quarter and the prior year. Media revenue grew by 10%, primarily due to higher sports- and entertainment-related revenue, although it fell short of previous expectations.

Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 9%, and the adjusted EBITDA margin rose by 250 basis points. This was primarily due to ongoing productivity and cost efficiencies. Rogers also declared a quarterly dividend of 50 cents per share on each of its outstanding Class B Non-Voting shares and Class A Voting shares.

Looking ahead to 2025, Rogers expects total service revenue to increase by 0% to 3%, adjusted EBITDA growth of 0% to 3%, capital expenditures of $3.8 billion to $4.0 billion, and free cash flow of $3.0 billion to $3.2 billion. The company anticipates strong free cash flow and continued network investments and expansion across all regions in Canada.

Rogers' strategic acquisition of Maple Leaf Sports & Entertainment Ltd. (MLSE) and potential structured equity investment deals could significantly impact its long-term financial outlook and competitive position. The acquisition of a 37.5% stake in MLSE for C$4.7 billion ($3.6 billion) in September 2024 gives Rogers control of the most valuable sports franchise in Canada. This acquisition allows Rogers to strengthen its media division, attract more subscribers to its wireless and cable services, and increase its revenue and EBITDA through higher sports-related revenue and potential synergies with its existing media assets.

A potential structured equity investment deal, potentially with Blackstone Inc., could provide Rogers with additional capital to invest in its core businesses, improve its financial flexibility, and enhance its competitive position by enabling it to make strategic investments in technology and infrastructure.

In conclusion, Rogers Communications' Q4 earnings beat expectations, and the company expects up to 3% EBITDA growth in 2025. With strategic acquisitions and potential investment deals, Rogers is well-positioned to maintain its competitive edge and continue delivering strong financial performance. As an investor, keeping an eye on Rogers' progress and potential opportunities can be an exciting and rewarding experience.