Shaw Communications to Restructure Ops - Analyst Blog

Canadian cable multiple-system operator, Shaw Communications Inc. SJR, has announced certain changes in its business structure to boost overall productivity. Also, the organizational changes might claim 400 jobs countrywide.

According to the new structure, the company operations will be divided into two parts. One section will focus on servicing residential customers including, satellite, cable, Internet and home phone facilities. On the other hand, the other part will take care of the company's business clients.

Shaw Communications' Media business will continue to operate as a separate unit. The company has also merged its engineering and IT department into Technology and Network Operations (TNO) group.

Although the structural changes will result in the retrenchment of 400 employees, the company will be hiring over new 100 employees. The new employees will be employed in the rising business segments of the company which include marketing, supply chain pricing and network architecture. Currently, the company has nearly 14,500 employees.

Recently, the company reported second-quarter fiscal 2014 financial results where both the top and the bottom line surpassed the respective Zacks Consensus Estimate. The company lost 20,758 video customers in the reported quarter. However, Shaw Communications added 12,767 Internet customers in the same quarter.

Shaw Communications currently has a Zacks Ranks #3 (Hold). Near-term catalysts include gain in high-speed Internet and telephony subscribers, the expansion of Shaw Go Wi-Fi networks, more applications supporting the Shaw Global Go TVEverywhere service and the launch of Anik G1 satellite, which enables the company to add over 140 channels for the Shaw Direct service. On the flip side, stiff competition results in continuous loss of video and DTH subscribers.

Other Stocks to Consider

Other better-ranked stocks worth considering in this sector include AT&T, Inc. T, BCE Inc. BCE and Nippon Telegraph and Telephone Corp. NTT. All these stocks carry a Zacks Rank #2 (Buy).