BCE’s profit beats expectations

BCE Inc.’ s profit edged up in the latest quarter as it added more subscribers than expected in both its wireless and wireline divisions, with chief executive officer George Cope crediting the boost in internet and television subscribers to investment in high- speed fibre connections and a new, cheaper TVstreaming product.

Canada’s l argest t elecommunications company, which is in the midst of an expensive fibre-to-the-home (FTTH) network build in the key Toronto market, reported Thursday a profit of $ 770 million in the three months ended Sept. 30, up 2.4 per cent from $752 million in the same period last year.

While wireless remained a key growth driver — Bell added 117,182 postpaid subscribers, the highest in its third quarter in five years and above analysts’ predictions of 111,000 — that was largely in- line with expectations as consumers’ ever- increasing demand for data continues to boost Canada’s entire wireless industry.

Cope expects the strength to continue into the holiday season given the new Apple Inc. iPhones and watch.

On a conference call with analysts he would not comment on the volume of iPhone 8 and 8+ devices sold, saying “it’s only fair” to leave that to Apple. Rogers Communications CEO Joe Natale said demand for the iPhone 8 was “anemic” as consumers wait for the iPhone X.

Bell’s wireline division beat Bay Street’s expectations, adding 44,424 internet customers and 36,399 IPTV customers, topping consensus estimates of 29,000 and 26,000 respectively. Includ- ing its satellite TV customers, it added 1,738 TV subscribers overall. It even lost fewer telephone subscribers than expected — 57,381 residential landlines compared to 80,587 in the same period last year.

Bell e x pects to have enough homes connected in Canada’s largest city to start a mass advertising campaign by early 2018. This will increase competitive intensity, as the upgraded connections enable speeds that Bell’s top rival Rogers Communications Inc. already offers across its entire footprint.

Bell’s overall revenue increased 5 per cent to $ 5.68 billion and adjusted earnings rose 5.8 per cent to $2.36 billion. Earnings per share dropped one cent to 86 cents per share due to a higher number of shares outstanding from the Bell MTS acquisition. The analysts’ average estimate was 85 cents, according to Thomson Reuters I/B/E/S.

The financial results were in line with analysts’ expectations, although Bell posted better margins than expected.