Rogers Communications Inc. rode the iPhone's popularity to a big jump in quarterly profit in its last quarter but said costs associated with selling the device could weigh on future earnings.
Rogers said yesterday that profits almost doubled in the third quarter to $495 million, or 78 cents a share, compared with $269 million, or 42 cents a share, in the year-earlier period.
More than a quarter of a million people signed up for the iPhone through Rogers during the third quarter after it became available in Canada in early July.
Canada's largest cable and wireless provider said it spent about $95 million subsidizing and marketing the iPhone during the quarter.
"Margins are going to keep going down in part in the near- to medium-term because of the iPhone," said Genuity Capital Markets analyst Dvai Ghose.
The company trimmed its earning projections for 2008 to reflect higher-than-expected cost of iPhone sales.
Investors certainly approved of the third-quarter results, sending Rogers shares up 10 per cent yesterday on the Toronto Stock Exchange.
About a third of the iPhones the company activated were new Rogers subscribers. The popular device benefits Rogers because users tend to spend more than the average wireless customer on things like mobile web surfing.
Revenue climbed 14 per cent to $3 billion "in the face of an increasingly challenging economic backdrop," chief executive Ted Rogers said in a statement.
The iPhone drove net additions in Rogers' wireless division to about 239,000 in the quarter.
The company's cable-Internet business saw its customer base rise by 29,000 to 1.6 million in the quarter, while digital-cable subscriptions grew by 58,000 to 1.5 million, Rogers said.
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