Shaw Communications (SJR) Q4 Earnings: What's In Store?
Zacks Investment Research | Oct 24, 2017 08:57AM ET
Shaw Communications Inc (NYSE:SJR) is scheduled to release fourth-quarter fiscal 2017 (ending Aug 31, 2017) results, before the opening bell on Oct 26.
In the last two quarters, the company’s bottom line met with the Zacks Consensus Estimate. However, the company’s earnings lagged the Zacks Consensus Estimate in the remaining two of the previous four quarters, with an average miss of 11.96%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Shaw Communications operates in a highly competitive Canadian wireless market with incumbents like Rogers Communications Inc (NYSE:RCI) , TELUS Corp (NYSE:TU) and BCE Inc (TO:BCE) . Stiff competition has resulted in losses in video, Internet and landline phone businesses.
Rolling out of new brands, advertising promotions to lure more subscribers and technological advancements is likely to escalate expenses going ahead. These combined costs will adversely impact margins moving ahead.
Moreover, the company’s cash and liquidity position seem to be a major concern for the company. At the end of third-quarter fiscal 2017, Shaw Communications had cash and total outstanding debt of $235.73 million and $7,677.9 compared with $545.54 million and $7,186.25 million, respectively, at the end of August 2016. In the reported quarter, the company generated $173.76 million cash from continued operations compared with $202.05 million from the prior-year quarter. Free cash flow totaled $177.80 million versus $245.15 million in the year-ago quarter, reflecting a decrease of 27.5%. Accumulating debt and decreasing cash flows pose severe trouble for the company's long-term growth prospects.
On the back of such headwinds, the company’s shares have declined 1.9% compared with the Zacks Investment Research
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