Shaw profits plunge on DTH deal
Star start-up losses drop net income 45%
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Net income for the quarter ended May 31 was down nearly 45% at C$5.7 million ($3.8 million), compared with $6.8 million for the third quarter of 1998.
That contrasted sharply with net income for the nine month period, which was $18.5 million, up 94% compared with the previous year's nine-month period.
The third quarter drop was due to a $10.5 million equity loss the company reported on its 49% stake in start-up DTH provider Star Choice, noted Mike Ostopowich, Shaw's finance VP. The quarter's previous year equity loss was $6.8 million.
Selling spree
In the nine-month figure, an even larger equity loss -- $29.0 million compared with $6.8 million the previous nine months -- was offset by Shaw's gain on the sale of part of its investment in @Home and Terayon in the U.S., which contributed $35.8 million after taxes to the company's operating income.
"Our gains on securities were greater than our equity loss in Star Choice ," said Ostopowich.
Revenue for both the quarter and the nine month period were up, "principally the result of growth in cable television and Shaw@Home Internet subscriber growth, continued expansion of the telecommunications base, and the strong ratings achieved by the programming and radio divisions," the company stated in a press release.
Revenue for the quarter was $147.2 million, up 10.2% compared with the year-earlier period.
Year-to-date revenue jumped to $433.5 million, up 12% from the previous year.
Calgary-based Shaw Communications is Canada's second-largest cable company, with Internet access, TV programming, radio, paging and telecom divisions. The company is also the largest shareholder in the DTH provider Star Choice.
