Cogeco posts higher profit, hikes dividend but faces 'challenging' U.S. environment

Cogeco Inc. raised its dividend as it reported its profit rose last quarter, but the company is bracing for a modest decline in overall revenues heading into 2027 amid competitive challenges in the United States.

The Montreal-based telecommunications company said Thursday it will now pay shareholders $1.007 per share, an increase of two cents per share. The move comes as it reported a profit of $81.5 million during its fourth quarter, which compared with a profit of $76.2 million during the same period last year.

That amounted to a profit of $1.87 per diluted share for the quarter ended Aug. 31, compared with diluted earnings per share of $1.71 last year.

Cogeco reported its revenue for the fourth quarter was $713.9 million, down year-over-year from $731.4 million. Cogeco Communications Inc., the company's cable and internet subsidiary, reported a fourth-quarter profit of $87 million, compared with a profit of $81.7 million during the prior-year quarter.

Chief executive Frédéric Perron said the bulk of Cogeco's recent challenges are coming from south of the border, where he described an intensifying competitive environment. That resulted in more than 11,000 U.S. internet customer losses during the quarter as American telecom revenue decreased 4.6 per cent.

"Rest assured that we're quite clear-eyed about the very challenging state of the U.S. market," Perron told analysts during a conference call.

"We're working hard doing the best we can to improve the performance of the business operationally."

The company offers wireless service under its Breezeline Mobile brand to customers in 13 states and earlier this year launched Welo, a digital-first internet brand which will soon be offered across 70 per cent of that U.S. footprint.

Chief financial officer Patrice Ouimet said elevated competition in the market is expected to persist throughout 2027.

The company issued financial guidance for its 2027 financial year, saying it expects a low-to-mid single digit per cent decline in revenue compared with this year. 

Scotiabank analyst Maher Yaghi called it a "weaker than expected" outlook as "deterioration in the U.S. business" overshadowed positives for the company during the quarter. 

"Overall, the results indicate that the U.S. turnaround remains a work in progress with estimate risk skewed to the downside," he said in a note.

The company painted a rosier picture of its Canadian operations, with Canadian telecom revenue increasing 0.6 per cent in the quarter.

Perron said Cogeco's internet brand Oxio shows "no sign of slowing down" as he highlighted subscriber growth across the company's footprint of Quebec and Ontario.

"In fact, we keep beating our internal records pretty much every quarter," he said.

"And what's very helpful is a lot of our sales come from referrals because customer satisfaction is so high, so the marketing cost is pretty low as well."

Ouimet said Cogeco is expecting Canadian revenue to be stable next year.

"We did perform well last year. As part of that, there's different elements. There's pricing, there is the customer additions, which we're planning to continue to grow … and then mobility is picking up as well," he said.

"So you take all this together, stability would be the way I would look at it for Canada."

This report by The Canadian Press was first published Oct. 29, 2026.

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By Sammy Hudes | Copyright 2026, The Canadian Press. All rights reserved.