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Shaw First-Quarter Profit Gains 38% on Phone Offering (Update1)

By Chris Fournier

Jan. 11 (Bloomberg) -- Shaw Communications Inc., Canada's second-biggest cable-television company, said first-quarter profit jumped 38 percent on rising sales from its digital telephone service.

Net income rose to C$112.2 million ($109.9 million), or 26 cents a share, in the quarter ended Nov. 30, from C$81.1 million, or 19 cents, a year earlier, Calgary-based Shaw said today in a statement. Sales advanced 11 percent to C$743.8 million, lower than the C$751.3 million average of four estimates in a Bloomberg survey.

Shaw lured phone subscribers from telephone companies including Telus Corp., Canada's second-largest. Shaw added about 50,300 digital-phone service customers in the quarter, more than the 36,000 estimated by National Bank Financial analyst Greg MacDonald in Toronto.

Cable companies, including Shaw and Rogers Communications Inc., the industry leader, snared about 1.9 million phone subscriptions at the end of 2007, or about 16 percent of the Canadian market, according to Moody's Canada Inc. analyst Darren Kirk. That's up from 9 percent in 2006, Kirk said yesterday.

Shaw climbed 40 cents, or 1.8 percent, to C$22.90 yesterday in Toronto Stock Exchange trading. The shares had advanced 16 percent in the year before today.

Telus, based in Vancouver, said in November it lost 35,000 fixed-line customers in the third quarter.