Tags: Shaw | business | growth | SJR

Shaw Searches for New Business Growth

By    |   Wednesday, 16 Nov 2011 04:30 PM

Canadian telecommunications company Shaw Communications (SJR) is in a search for new businesses to provide some new growth revenue streams. The search has pushed the company to add, drop and start down several new business avenues.

Shaw Communications provides cable and satellite television services, broadband Internet services and landline telephone services to customers primarily in western Canada. Cable services generate about 65 percent of revenues, satellite services provide 17 percent of sales and media sales brought in 18 percent of 2011 revenues.

The 2011 fiscal year for Shaw Communications ended on Aug. 31. For the year, the company saw $4.74 billion of revenue, up 27 percent from $3.72 billion in 2010. (Note: All figures are in Canadian dollars, roughly at parity to the U.S. dollar at this writing.) Net income for the year was $1.24 per share, up slightly from $1.23. These results vary little from 2009, when the company reported net income of $1.25 per share.

New business lines

In October 2010, Shaw Communications closed the purchase of CanWest Global Communications, a media production company, for approximately $2 billion. The acquisition became the media division of Shaw Communications and accounts for the media revenues discussed above.

Shaw Communications had been pursuing entrance into mobile communications services. With the third quarter earnings report, the company announced it would no longer attempt to enter the mobile business and write off the related expenses already incurred. The announcement resulted in a 15 percent decline in share value.

The current project from Shaw is the development of a wide range Wi-Fi network so that the company's Internet customers have Wi-Fi access at a large number of locations. In September the company announced the commencement of initial trials of HotSpot 2.0 technology in conjunction with Cisco Systems (CSCO). It will be interesting to see the level of revenue the company can generate from a service which is widely available for free.

The most recent analyst report on SJR was from the Bank of America Merrill Lynch analysts, downgrading the stock to neutral from buy.

The company next reports on Jan. 19.

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Canadian telecommunications company Shaw Communications (SJR) is in a search for new businesses to provide some new growth revenue streams. The search has pushed the company to add, drop and start down several new business avenues. Shaw Communications provides cable and...
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2011-30-16
Wednesday, 16 Nov 2011 04:30 PM
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