BCE Q3 Profit Jumps 41%

by Gaurav Kheterpal on November 4, 2011

This year just keeps getting better for BCE. Despite a dismal first quarter, Bell posted better-than-expected adjusted Q2 earnings in August. In the third quarter, the company has gone from strength to strength as it joined the LTE bandwagon and launched CTV Mobile.

The general expectation was that Bell would better its previous quarterly performances in Q3 and the company hasn’t disappointed. Thanks largely to an impressive showing by CTV and strong wireless growth, BCE Inc. reported a 41% increase in third-quarter profit on Thursday and raised its earnings guidance going forward.

The company also reiterated its intent to get leaner and meaner, in the process slashing 1,200 jobs from middle management in the most recent quarter.

Bell Canada Enterprises (BCE) reported an 8.7% increase in operating revenues to $4.9 billion and a 41.4% increase in net earnings to $642 million, as compared to the same quarter last year. On an adjusted basis, BCE’s earnings rose 14.8 percent to 93 cents per share, beating average analyst expectations of 74 cents. Bell attributed the increased earnings largely to higher tax adjustments from the favourable resolution of various tax matters and the fair value loss on the Bell Aliant fund unit liability in the third quarter of 2010.

Bell witnessed strong growth in television and wireless sectors. The company would take heart from its strong showing in the TV segment where it added 26,037 new television subscribers, primarily in the Montreal area, where Bell is betting big on its Fibe TV service. Bell’s overall Television revenue increased 3.9%.  CTV generated sales of $435 million in the quarter.

Despite the increased competition, Bell performed decently in the wireless segment as well. It added 126,854 customers on contract and lost 41,105 lower-value pre-paid customers in the quarter – a much improved performance considering that it added 94,000 post-paid contract customers last quarter and lost nearly 58,000 pre-paid users. However, churn postpaid and prepaid churn increased to 1.5% (from 1.4% same quarter last year) and 3.9% (from 3.4% same quarter last year). The company’s wireless data revenue jumped 34% year-over-year. Bell says smartphone users accounted for 43% of its postpaid subscribers, as compared to 26% last year. On the other hand, BCE lost 110,629 landline subscribers and revenue from landline division fell by 3.1% in the quarter.

“Bell’s strategy of heavy investment in world-leading broadband networks to deliver the best media and data services across all four screens is underpinned by a strict focus on customer service and cost efficiency, and it’s driving strong performance in our broadband wireless, TV and Internet growth services,” said George Cope, President and CEO of BCE and Bell Canada.

BCE has increased its full-year 2011 guidance to between $3.10 and $3.15 per share of adjusted earnings, up from the $3.05 to $3.10 range given in May.

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Written by: Gaurav Kheterpal. www.digitcom.ca. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

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BCE Q1 Profit Jumps 14% On Strong Wireless Performance — TheTelecomBlog.com
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