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Rogers Communications Inc. (NYSE:RCI) declared solid financial results for the first quarter 2010. Quarterly net income was $380 million or 64 cents per share compared to a net income of $309 million or 49 cents per share in the year-ago quarter. However, first quarter adjusted (excluding special items) EPS of 66 cents was significantly above the Zacks Consensus Estimate of 54 cents. This reflects the aggressive cost cutting measures taken by management during 2009.

Quarterly total revenue was $2,887 million, up 5% year over year. This is also better than the Zacks Consensus Estimate of $2,773 million. This was primarily due to an increase in sales for all the three segments, particularly massive growth of the Wireless Data revenue.

Management has streamlined the operating cost structure to improve efficiency. Quarterly operating profit was $1,122 million, up 4% year over year. During the reported quarter, the company repurchased 9 million Class B Non-Voting shares for total consideration of $302 million and paid dividends on its common shares totaling $175 million.

During the first quarter 2010, Rogers generated $853 million of cash from operations compared to $688 million in the year-ago quarter. Free cash flow during the same quarter was $487 million, compared to $329 million during the year-ago quarter.

At the end of the first quarter 2010, Rogers had $771 million of cash and marketable securities on its balances sheet, compared to $930 million at the end of fiscal 2009. Total outstanding debt, at the end of the first quarter 2010 was $8,267 million, compared to $8,464 million at the end of fiscal 2009.

Wireless Segment

Quarterly revenue was $1,662 million, up 8% year over year. Postpaid revenue was $1,515 million, up 8% year-over-year and Prepaid revenue was $66 million, down 1% year-over-year. Equipment sales were $81 million, up 14% year over year.

Quarterly operating profit for the whole segment was $816 million, up 13% year over year. Operating margin was 49.1% in the reported quarter compared to 46.6% in the year-ago quarter. In the first quarter, wireless Data revenue was $415 million, up 40% year over year. Wireless Data revenue represented around 26% of total wireless network revenue compared to 20% in the prior-year quarter.

During the first quarter, wireless segment activated approximately 348,000 smartphones. Most of those are either iPhone 3G, BlackBerry or Andriod-based handsets. At the end of the reported quarter, Postpaid retail subscribers’ base was around 7.026 million, up 7.2% year-over-year. Smartphone customers now constituted 33% of overall Postpaid subscribers compared to 23% in the year-ago quarter. Prepaid subscribers’ base was around 1.481 million, up 1.4% year-over-year.

Cable Segment

Quarterly revenue of $997 million was up 3% year over year. Basic cable operations revenue was $789 million, up 6% year-over-year. RBS revenue was $133 million, up 4% year over year. Rogers Retail revenue was $89 million, down 13% year over year. Quarterly operating profit for the whole segment was $335 million, down 3% year over year. Operating margin was 33.6% in the reported quarter compared to 35.6% in the year-ago quarter.

At the end of the reported quarter, Cable TV subscribers’ base was around 2.296 million, down 0.7% year-over-year. Internet subscribers’ base was 1.636 million, up 3.4% year over year. Digital cable terminal base was 1.689 million, up 6.6% year-over-year. Cable Telephony lines were 959,000, up 11.9% year over year.

Media Segment

Quarterly revenue of $301 million was up 6% year over year. Quarterly operating profit was $4 million, down 33% year over year. Operating margin was 1.3% in the reported quarter compared to 2.1% in the year-ago quarter.

Within this segment, Television, Sportsnet and The Shopping Channel delivered year-over-year increases in revenues driven by significant prime time ratings improvements, increased subscriber fees and improvements in consumer discretionary spending. On the other hand, Publishing and Sports Entertainment divisions reported revenue declines in the same quarter.

Source: A Surprisingly Good Quarter for Rogers