Shaw Communications Intrigues Investors (SJR, RCI, TU, VZ, T, BCE)

*Acquisition Costs Dampen Earnings*Shaw Communications Inc.,
headquartered in Calgary, Alberta, Canada, has operations including
broadcast, broadband cable, high-speed internet, and satellite TV, as
well as telephone. It has 3.4 million customers, with 1.8 million
internet customers and one million digital phone customers. Shaw has
a market cap of $8.7 billion. The company reported C$1.08 billion in
revenue this quarter, a 19% increase from C$905 million in last year's
first quarter. Revenue was up 7% in its cable division, 3% in
satellite, and 8% in media.

Net income was C$20 million or Cfour cents per share, compared to
C$114 or C26 cents per share. This was due in large part to a C$139
charge for the discounted value of a C$180 million pension benefit
obligation from the company's acquisition of Shaw Media, along with
other restructuring charges. On a comparable basis, excluding
non-operating charges from both this year's first quarter and last
year's, net income would have been C$159 million in this year's
quarter compared to C$180 million in last year's.

*A Growing Telecom*Shaw acquired Canwest Global Communications, known
as Canwest Media, at a cost of around C$2 billion in 2010 and
completed the transaction this year. Shaw expects enhanced revenue
growth this year, with projected free cash flow of C$550 million for
2011. It generated C$145 million in free cash flow in the first

Prior to the dividend hike, Shaw yielded 4.2% , comparable to
competitors *Rogers* *Communication* (NYSE:RCI), which yields 3.8
percent and *Telus* (NYSE:TU), which yields 4.8%. Earnings are
expected to reach C$1.47 per share in 2011 and C$1.56 in 2012. While
this earnings growth may seem modest, it's comparable or better than
projections for telecom giants *Verizon* (NYSE:VZ) and *AT&T*
(NYSE:T). The stock, which hasn't done much in the last year, trades
at an attractive forward multiple of just over 14, compared to more
than 17 for the industry.

*Wireless*Shaw has been late to wireless, but is gearing up its
rollout. The company expects to invest C$150 million to C$200 million
in its new wireless services in 2011, which should hit the market
early 2012.While Shaw had a setback as wireless executive Laurence
Cooke, formerly *BCE* (NYSE:BCE) Bell Mobility's chief operating
officer, left the company recently, Shaw's opportunity in wireless is
nevertheless substantial.

Though Shaw has lagged its competitors BCE, Rogers and Telus, which
are already in place in the wireless business, Shaw is expected to
bring both scale and its package of bundled offerings to the wireless
space. This should help Shaw make up ground from its late start in
wireless and become highly competitive.

*The Bottom Line*Shaw and other Canadian telecoms present an
interesting group of stocks for investors to consider. While many U.S.
investors might focus on Verizon or AT&T, Shaw and some of the other
Canadian telecoms are attractive, somewhat overlooked stocks. Shaw
historically has strong revenue, earnings and cash generation
performance. Even with the earnings bump this quarter due to charges,
it should still have a good year. Shaw is set to grow. Its potential
growth in wireless and smartphones makes this company even more
attractive long term.

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Source: Investopedia.Com