Rogers declares the Blue Jays’ part of a big financial success, though actual Q2 results are a bit murkier


Oh boy, financial statements news!

This is always a bit of a slog — at least for me, as someone who is a total layman when it comes to this stuff — but obviously for those of us who follow the team and want to know whether it’s being done right by Rogers, it’s relatively important.

And this time we have some particularly good news… seemingly. Maybe? It certainly is if you prefer the take offered by the Canadian Press piece that reads like a Rogers press release. (Here via the Winnipeg Free Press):

The popularity of the Toronto Blue Jays and Raptors along with a boom in the number of new wireless customers helped drive revenue and profits for Rogers Communications in its second quarter.

. . .

Rogers Media revenue rose by $33 million to $615 million. Nearly two-thirds of that revenue came from sports, which helped offset lower advertising revenue from conventional television, publishing and radio operations.

“The success of the Blue Jays and the Raptors led to increased advertising revenues of Sportsnet, as well as higher subscriber fees,” Laurence said in a separate conference call with analysts.

Indeed, Rogers’ own online quarterly report for Q2 2016 (i.e. April – June) says right off the top that the company delivered “Media revenue growth of 6% and improved adjusted operating profit year on year driven by the higher revenue from Sportsnet and success of the Toronto Blue Jays.”

Hey cool, right? Uh… they’d like to spin it that way I guess. Except while the Media division’s revenue was growing by 6% over the same quarter in 2015, their operating expenses grew by 7%. The division’s “adjusted operating profit” was stagnant at $90-million, and its “adjusted operating profit margin” is down 0.9 points, from 15.5% to 14.6%. And the data for the past two quarters combined, compared to the first two quarters of 2015, looks worse: 2% revenue growth to a 3% rise in operating expenses; $29-million less in operating profit (from $58-million down to $41-million); and an “adjusted operating profit margin” down 1.6 points, from 5.5% to 3.9%.

That sounds… less rosy. As does the Zacks Equity Research report (via titled Rogers Communications (RCI) Lags Q2 Earnings Estimates.

“Rogers Communications Inc. RCI declared mixed financial results in the second quarter of 2016,” they declare, “wherein the bottom line missed the Zacks Consensus Estimate but the top line surpassed the same.”

We’re told that “adjusted earnings per share were 62 cents per share, short of the Zacks Consensus Estimate of 64 cents,” for whatever that’s worth.

Does Zacks actually represent the consensus? The expectations of shareholders? Anything even worth listening to?

How the hell should I know?

Canada’s Financial Post seemed more content with the results, leading their piece by saying that Rogers “reported Thursday earnings excluding some items of 83 cents per share, topping the consensus estimate of 82 cents,” adding that “revenue and operating profit for the quarter ending June 30 of $3.46 billion and $1.35 billion were in line with Street estimates.”

And RCI stock rose to $56.81 per share at the close of the market today, compared to $53.60 when the market opened on Thursday, so… maybe it really is good news?

Maybe it’s good news regardless that they’re so reliant on a successful Jays team to offset losses out there? Maybe this winter they’ll feel they’ll get a better return on investment putting money into the Jays than they will other segments?

I dunno. But these things seem somewhat pertinent to keep in mind before we go spending in our heads all that money Rogers would prefer us to think has flowed to them, in part because of the Jays, in such exceptional ways. If the company, and therefore the team, has to answer to shareholders, then unfortunately I guess we have to think like shareholders. And so even though it seems like we’re talking about tremendous amounts of cash and a company truly awash profits here, I’m pretty sure that coming short of expectations isn’t good, and that only just meeting some expectations probably isn’t either, no matter how brightly they spin it.

Unless I’m wrong! Which I entirely might be! Either way, hell of a scam, isn’t it?