There’s no doubt that Bell has hit a purple patch in the last couple of quarters. Last November, the company re-organized itself as a leaner and meaner company reporting an impressive 41% increase in profit. It then made an aggressive push in several quarters – including its deals with NFL Mobile and the MLSE. Along the way, the company launched fibe-to-the-home service and also upgraded its Push To Talk offering.
However, industry experts were skeptical of Bell’s latest quarter performance, especially in wake of Rogers’ ordinary performance. However, those doubts were squashed yesterday as the company topped earnings estimates for the first quarter and reported a quarterly profit jump 14.1 per cent, driven largely by a strong performance of its wireless division.
The company announced that quarterly net profit grew to C$574 million, or 74 Canadian cents per share, from C$503 million, or 67 Canadian cents per share, a year earlier. Adjusted earnings were C$580 million, or 75 Canadian cents a share, a much improved performance over the C$543 million or 72 Canadian cents a share a year earlier. Bell’s revenue shot up by 9.9 percent to C$4.91 billion.
Bell announced its Best Q1 Wireless EBITDA growth in five years at 13.0 percent as wireless service margin expanded to 42.9% on 6% increase in service revenue. The company reported postpaid net activations of 62,576 continuing its strong showing in the smartphone segment. ARPU increased by 4.2 percent to $53.84 a month. Bell’s performance in the wireless segment is all the more impressive considering how chief rival Rogers struggled through the quarter.
Bell says that that more than half of its postpaid subscriber base now uses smartphones. The company expects more postpaid subscribers to adopt smartphones in the coming years.
“The Bell team’s successful execution of our Strategic Imperatives resulted in solid Q1 financial performance, with significant growth in Bell revenue and EBITDA reflecting especially strong contributions by Bell Wireless and Bell Media,” said George Cope, President and CEO of Bell Canada and BCE. “We look forward to welcoming Montreal-based Astral Media to the Bell team later this year as Bell works to expand our media leadership, delivering the best content across the best networks to any broadband screens our customers choose.”
Bell’s Media division also performed strongly – posting operating revenue of $512 million this quarter, thanks to an increase in advertising revenues supported by strong audiences in conventional and specialty TV channels. BCE claims it’s the first in Canada to serve 3 million Internet customers, thereby making it Canada’s largest Internet Service Provider.