Wireless growth boosts BCE revenue
For a company mired in a festering feud with the country’s communications watchdog and the ink still wet on former top executive Kevin Crull’s pink slip, BCE Inc. and its latest financials didn’t skip a beat.
During the first quarter of fiscal 2015, the Montreal-based telco posted results for revenue, adjusted net income, quarterly subscriber growth and adjusted earnings per share that exceeded analyst consensus, prompting president and chief executive officer George Cope to proclaim at the annual shareholders meeting Thursday that “it was the first time I can actually remember” BCE achieving such a feat.
“Shareholders are seeing our revenue growth not because pricing is going up in the industry, but because people are using our products more and more,” said Cope, seemingly addressing a notion among analysts that Bell has grown at the expense of chief rival Rogers Communications Inc., which has been pushing higher-margin plans. “These types of numbers are hard to maintain,” he warned, but his plan is clear: “Make the investments necessary to get ourselves back to a leadership position in wireless.”
Much of the sales growth can be attributed to the wireless division, which gained 9.7 per cent compared with the same period last year, to $1.64 billion, with clients spending an average of $60.83 on services per month. BCE also added a net 35,373 contract subscribers and improved customer churn to 1.18 per cent. Bell has 8.1 million total wireless subscribers — as does Telus Corp. — compared with Rogers’ 9.4 million.
BCE touted gains in wireline, too, and boasted about the strong pickup of its Fibe television offering, which exceeded the one-million subscriber mark on April 17. It added a net 60,863 clients this quarter.
Together, “this should allow BCE to maintain its 5% dividend growth model,” Desjardins analyst Maher Yaghi wrote in a report. Yet, despite its results, shares of BCE fell 1.8 per cent Thursday, to $53.19.
Chief financial officer Siim Vanaselja attributed the bulk of BCE’s $224-million charge to severance, acquisitions and other costs to a $137-million litigation expense related to satellite TV piracy charge in Quebec. The company is in the process of appealing the court’s decision to the Supreme Court of Canada. He expects to know whether BCE will be granted leave to appeal within the next quarter.
At Thursday’s meeting, investors expressed concern over the dearth of gender and ethnic diversity among directors and senior managers, concerns over executive pay, and qualms about customer service.
Three proposals demanding change, including imposing a quota on the proportion of women on its board, were overwhelming rejected.