April 24 (Reuters) - Rogers Communications ( RCIAF )

posted a drop in first-quarter profit on Wednesday, hurt by

higher costs from the acquisition of Shaw Communications,

sending shares of the Canadian telecom company down more than

3%.

The company saw a 23% jump in operating expenses in the

quarter, as it booked C$142 million ($103.6 million) in

restructuring costs mainly for severance, including about C$30

million for its acquisition of Shaw Communications. The C$20

billion deal closed last year.

"Finance costs, the acquisition of Shaw Telecom, and

lower media subscription revenues are all weighing on net

earnings," said Michael Ashley Schulman, chief investment

officer at Running Point Capital.

Net income fell 50% to C$256 million. However, adjusted

profit was in line with expectations. The net income drop took

the shine off strong growth in Rogers' wireless business.

The company added 98,000 net monthly bill-paying wireless

phone subscribers in the quarter, topping the Visible Alpha

consensus estimate of 77,530 net additions, helped by demand

from rising population driven by temporary foreign workers and

immigrants.

Revenue for the company's media business, which owns the

Toronto Blue Jays baseball team, fell 5% to C$479 million in the

quarter ended March 31 due to lower subscriber revenue and

higher media content costs. The business also saw a 7% rise in

operating costs to C$582 million because of programming and

production costs and higher payroll-related expenses for its

baseball team.

In the quarter, Rogers' free cash flow, a metric closely

watched by investors as it helps determine dividend payouts,

rose 58% from a year earlier to C$586 million, beating a Visible

Alpha estimate of C$501.8 million.

The company's total revenue rose about 28% to C$4.90

billion, compared with analysts' average estimate of C$4.92

billion, according to 12 analysts polled by LSEG data.

($1 = 1.3683 Canadian dollars)

($1 = 1.3702 Canadian dollars)