Cogeco reports Q3 loss amid 'significant turbulence' for U.S. telecom sector

The Cogeco logo is seen in Montreal on Oct. 22, 2020. THE CANADIAN PRESS/Paul Chiasson

Fierce competition south of the border weighed on Cogeco Inc.’s earnings during its latest quarter despite what the company described as encouraging results for the Canadian side of its business.

The Montreal-based telecommunications company reported a loss of $1.8 billion during the third quarter, compared with a profit of $74 million during the same period a year earlier. That amounted to a diluted loss of $42.84 per share, compared with diluted earnings per share of $2.13 last year.

The company said the loss was mainly due to non-cash pre-tax impairment charges recognized during the quarter, which amounted to $2.2 billion within its American telecom segment.

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The U.S. cable sector is “going through significant turbulence,” chief executive Frédéric Perron told analysts on a conference call Thursday morning. 

Cogeco’s U.S. telecom revenue decreased by 10 per cent during the quarter, which it attributed to a lower subscriber base compared with the previous year, a larger proportion of customers subscribing to internet-only services, as well as a competitive pricing environment.

He said those factors are forcing Cogeco to stay “realistic” about the financial performance of its U.S. business, which offers wireless service under its Breezeline Mobile brand to customers in 13 states.

Perron said uncertain economic conditions, including high inflation, have also contributed to a decline in Cogeco’s average revenue per user in the U.S.

“As customers see a higher cost of living on fuel, on groceries, on living in general ... they’re trying to optimize their wallets and therefore we’ve seen harder negotiation behaviours from customers calling our retention line,” he said.

“We’re implementing advanced analytics and AI to optimize our retention investments. In some cases though, there’s just so much you can do when the customer has a competitive offer in hand.”

Cogeco reported its overall revenue for the third quarter was $724.2 million, down 4.5 per cent year-over-year.

The company’s results “were in line with expectations,” said Desjardins analyst Jerome Dubreuil, who noted “solid execution” on the company’s Canadian segment.

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Canadian telecom revenue increased 0.5 per cent, which was mainly driven by the cumulative effect of high-speed internet service additions over the past year.

Cogeco also launched its mobile service in Canada last summer, which is targeted toward lower-data users. Its coverage is being delivered under the mobile virtual network operator framework, which allows telecoms to offer cellphone service through rival carriers’ networks.

“Our Canadian performance remains strong,” Perron told analysts, adding that wireless sales “remain ahead of plan.”

“We keep growing our Canadian customer base and have been able to pull back on some of our promotional intensity in light of calmer market conditions.”

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Sammy Hudes, The Canadian Press

This report by The Canadian Press was first published July 16, 2026.

Companies in this story: (TSX:CGO)