BCE Q2 Profit Jumps 31%

by Gaurav Kheterpal on August 10, 2012

In the last couple of weeks, two of the ‘Big Three’ Canadian wireless giants reported contrasting quarterly results. While Rogers improved its showing from the last quarter, it was still no match for Telus’ spectacular performance, especially in the wireless segment.

Understandably, all eyes turned to Bell and it was expected that Canada’s largest communications company would report another impressive quarter. Expectations were high as the company had reported profit jumps of 41% (Q3, 2011) and 14% (Q1, 2012).

And Bell hasn’t disappointed – the company reported a second-quarter profit of $773 million, a phenomenal 31% increase from $590 million or 76 cents per share in the second quarter of 2011. The company has raised both its dividend and 2012 earnings forecast to between $3.15 and $3.20 per share.

Bell reported adjusted net earnings attributable to common shareholders of $788 million, an increase of 18.9% compared to $663 million in Q2 2011.  The company’s operating revenue was $4.92 billion in the second quarter of 2012, down from $4.95 billion a year ago. As for a breakdown among various verticals, revenue grew 6.7% at Bell Wireless and 0.9% at Bell Media this quarter, and decreased 3.9% at Bell Wireline, resulting in a 0.5% decline in total Bell revenues.

“The Bell team continues to execute our customer-focused growth strategy across all services, leveraging our multi-billion-dollar investments in the latest broadband networks to deliver next-generation mobile, TV and Internet services and the best content across every screen. Bell is bringing broadband innovation, expanded choice and enhanced competition to Canadian communications, and these strong results – including exceptional wireless performance, continued fast growth in Bell Fibe TV and industry-leading performance at Bell Media – show it’s clearly a strategy with momentum,” said George Cope, President and CEO of BCE and Bell Canada.

In the last couple of years, BCE has followed an inorganic growth strategy, munching up everything and anything in the Canadian entertainment landscape it can get its claws on. It snacked on CTV and started Bell Media as a result. Along with owning CTV (28 standard TV stations and 30 specialty channels), BCE Inc. has its fingers in the Montreal Canadians with a minority stake in the franchise. It has also joined forces with Rogers Communications to buy a fair chunk of the Toronto Maple Leafs. And there’s also the 32 or so radio stations. And 35 percent of Dome Productions.

Last month, Bell partnered with a group of investors and financial backers to purchase Q9 Networks, a data centre provider.

However, the company’s plans to acquire Astral Media are currently under the legal scanner. The latter is a Montreal-based company that will give Bell access to a load of French language radio programming in Quebec and, yes, more television channels, including the Movie Channel, HBO Canada and Family. Montreal-based arch rival Quebecor Inc. has complained that BCE’s ownership of Astral will give it too much dominance of the local television market, and Canada’s Competition Bureau has agreed to review those concerns.

However, BCE remains “very confident” to complete its acquisition of Astral Media close the deal in the fourth quarter.

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

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