Tech stock to watch: Shaw Communications Inc Class B (NYSE: SJR)

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Shaw Communications Inc Class B (NYSE: SJR) stock fell 0.03% on 14th January, 2020 pre-market session (Source: Google finance) after the company missed the earnings estimate for the first quarter of FY 20. The company’s wireless subscriber base is now more than 1.7 million customers, that includes approximately 67,000 postpaid net additions in the first quarter. In Q1, the company had also began successfully renewing subscribers from the initial December 2017 iPhone cohort. The company is investing to improve the network for the benefit of the Wireless customers. The deployment of 700 megahertz spectrum is substantially complete in Western Canada, and the company plan to be fully deployed in the East by the end of fiscal 2020.

Moreover, Wireline EBITDA rose 3.4% this quarter, which includes CAD21 million related to IFRS 16. First quarter wireless service revenue grew over 18% year-over-year to about CAD200 million and EBITDA increased over 60% to CAD77 million, out of which CAD21 million was related to IFRS 16.

SJR in the first quarter of FY 20 has reported the adjusted earnings per share of 31 cents, missing the analysts’ estimates for the adjusted earnings per share of 33 cents, as per financial markets data firm Refinitiv. The company had reported the adjusted revenue growth of 2.1 percent to $1.38 billion in the first quarter of FY 20, beating the analysts’ estimates for revenue of $1.38 billion. The revenue increased due to the increased wireless revenue which helped offset declines in some of its non-wireless consumer segments including in video, satellite and phone subscribers. EBITDA rose over 8% to CAD588 million.

Additionally, on December 9, the company had raised CAD800 million of senior notes, comprised of CAD500 million 10-year notes at 3.3% and CAD300 million of 30-year notes at 4.25%. After this successful offering, the company has completed the early redemption of a total of CAD800 million worth of bonds that were maturing in 2020 and 2021. The company continues to have a fully undrawn five year CAD1.5 billion committed credit facility. The company had repurchased and canceled approximately CAD25 million worth of Class B shares during the quarter.

The company continues to project fiscal 2020 adjusted EBITDA to be in a range of 11% to 12%. Excluding IFRS 16, adjusted EBITDA is expected to rise in the range of 4% to 5%. Free cash flow is projected to be approximately C$700 million for FY 20.

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