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Canada's Rogers raises forecast after beating profit estimate; shares up

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·2 min read
FILE PHOTO: Rogers Building, home of Rogers Communications in Toronto
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By Sonia Cheema

(Reuters) -Canadian telecom company Rogers Communications Inc beat analysts' estimate for quarterly profit on Wednesday and raised its forecast for the year, benefiting from steady demand for its wireless and internet services.

Shares of the company, which said it expects to close its acquisition of rival Shaw Communications in the second quarter, rose about 3% at midday.

Rogers has gained from the expansion of its 5G infrastructure to more local communities, as consumers demand faster internet. A resumption in international travel has also raised wireless demand, while more sporting events have benefited the company's media business, which includes including its sports media and entertainment, and broadcasting businesses.

The telecom giant has increased its total service revenue forecast for the year to 6% to 8%, from 4% to 6%, and its core profit growth forecast to a range of 8% to 10%, from 6% to 8%.

"It is not common for telecom companies to increase their outlook this early in the year, which speaks to management’s improved visibility on the company’s operations amid the reopening," Jerome Dubreuil, analyst at brokerage Desjardins, said in a note.

Excluding items, Rogers earned 91 Canadian cents per share, beating estimates of 83 Canadian cents, according to IBES data from Refinitiv.

Revenue rose 4% to C$3.62 billion ($2.90 billion) but came in a tad below estimates of C$3.63 billion, signaling intense competition from companies including Telus Communications and BCE Inc.

The results also come after a months-long boardroom battle for the control of Canada's biggest wireless carrier that saw Chairman Edward Rogers ousting Chief Executive Joe Natale and instead appointing his confidante Tony Staffieri.

The tussle has weighed on Rogers' shares and raised questions over whether it would impact its proposed C$20 billion buyout of Shaw.

($1 = C$1.25)

(Reporting by Sonia Cheema; Editing by Maju Samuel)

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