Rogers Communications Inc. (NYSE: RCI) stock lost over 1.1% on 19th October 2018 (Source: Google Finance) although the company had a steady growth in the service revenues, while driving efficiency deeper and deeper into the company which is resulting in meaningful margin expansion.
The company reported total revenue growth of 3% and adjusted EBITDA growth of 8%. The Strong financial and operational performance in Wireless include the service revenue growth of 5% and adjusted EBITDA growth of 8%, margin expansion of 90 basis pointsand postpaid net additions of 124,000 with postpaid churn of 1.09%, improved 7 basis points — best Q3 postpaid churn in 9 years. The Blended ABPU increased 4% and blended ARPU increased 3%. The Cable revenue growth of 1% and adjusted EBITDA growth of 4%, margin expansion of 160 basis points with continued strong Internet revenue growth of 8% and internet net additions of 35,000, up 6,000. The increasing full-year 2018 guidance for adjusted EBITDA growth to 7% to 9% and for free cash flow growth to 5% to 7%.
The net income and adjusted net income increased this quarter by 17% and 13%, respectively, as a result of higher adjusted EBITDA, partially offset by the higher associated income tax expense and higher depreciation and amortization. The company continued to generate substantial cash flow from operating activities of $1,304 million this quarter and free cash flow of $550 million. Cash flow from operating activities decreased by 5% as a result of lower net funding provided by working capital items, partially offset by higher net income and lower cash interest. Free cash flow increased by 5% as a result of higher adjusted EBITDA, partially offset by our planned increase in capital expenditures driven by investments in our wireless and cable networks. The solid financial results enabled the company to continue to make investments in our network, strengthen the balance sheet and liquidity, and still return substantial dividends to shareholders. The company paid $247 million in dividends this quarter. It ended the third quarter with a debt leverage ratio of 2.5, down from 2.7 at the end of 2017.