Did Rogers Communications Inc's (TSE:RCI.B) Recent Earnings Growth Beat The Trend?

For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Rogers Communications Inc's (TSX:RCI.B) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for Rogers Communications

Commentary On RCI.B's Past Performance

For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to examine different stocks on a similar basis, using the most relevant data points. For Rogers Communications, the most recent bottom-line is CA$1,283.0M, which, against the prior year's level, has increased by 16.21%. Given that these figures may be fairly short-term thinking, I’ve determined an annualized five-year figure for RCI.B's net income, which stands at CA$1,430.0M. This suggests that, although earnings increased from last year's level, over the longer term, Rogers Communications's earnings have been diminishing on average.

What could be happening here? Well, let's look at what's transpiring with margins and if the entire industry is facing the same headwind. Revenue growth over the past couple of years, has been positive, however earnings growth has been declining. This suggest that Rogers Communications has been growing expenses, which is hurting margins and earnings, and is not a sustainable practice. Scanning growth from a sector-level, the Canadian wireless telecommunication services industry has been enduring some headwinds over the previous twelve months, leading to average earnings dropping by more than half. This is a a strong change, given that the industry has been delivering a relatively flat growth rate over the last couple of years. This suggests that any near-term headwind the industry is experiencing, Rogers Communications is less exposed compared to its peers.

What does this mean?

Rogers Communications's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. I recommend you continue to research Rogers Communications to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for RCI.B’s future growth? Take a look at our free research report of analyst consensus for RCI.B’s outlook.

2. Financial Health: Is RCI.B’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.