BCE profits rise on Internet television.
TORONTO • BCE Inc. posted a near 10% increase in fourthquarter profit on Thursday as gains in wireless results were buttressed by unexpected strength in BCE’s Internet-TV service.
The Montreal-based company had a “great quarter and solid guidance,” said Canaccord Genuity Group Inc. analyst Dvai Ghose. BCE stock rose 18¢, 0.3%, to close at $58.97 on the Toronto Stock Exchange.
While BCE’s forecasts for 2015 were largely in line with expectations, analysts said surprisingly strong wireline subscriber and revenue gains show the company is taking market share from its cableTV competitors.
BCE gained 34,126 net broadband, or high-speed Internet, customers in the quarter, while rival Rogers Communications Inc. lost 4,000 such subscribers, Mr. Ghose said. For 2014, BCE increased its broadband base by 4.7%, versus a 1.7% gain at Rogers, he said.
BCE’s Internet television offering, Fibe, is reducing customer churn, while adding demand for additional services as customers bundle products, said Desjardins Capital Markets analyst Maher Yaghi.
BCE, which also lifted its annual dividend 5.3% to $2.60, added 118,120 postpaid wireless customers, while losing 34,622 prepaid customers. Rogers lost 58,000 postpaid wireless customers, it said late last month. BCE’s blended average revenue per user, an important metric in the wireless industry, rose 5.5% to $61.12.
Mr. Ghose says BCE stole “significant” market share from Rogers in the wireless market, and posted “remarkably strong” wireline results.
The growth in wireless and Internet-television helped offset a decline in revenue at Bell Media — owner of CTV, numerous specialty TV channels and dozens of radio stations — which saw its operating revenue fall 3.9% from a year ago to $789 million. The company also recorded a $95 million charge in the quarter, mainly to reflect the reduced value of its conventional TV properties.
“While initially accretive, in our view, the CTV and Astral acquisitions are now creating problems,” Mr. Ghose said in a note to clients.
BCE purchased Astral Media Inc. for $3.4 billion in 2013.
For 2015, BCE forecast revenue growth of 1% to 3% and adjusted EPS of $3.28 to $3.38, from $3.18 in 2014.
“Our financial targets for this year reflect our expectation for continued strong wireless segment profitability, positive growth in wireline segment performance, as well as healthy earnings and free cash flow growth from operations,” said chief financial officer Siim Vanaselja.
Fourth-quarter net income rose to $542 million from $495 million in the year-before period. On an adjusted basis, earnings per share rose to 72¢ from 70¢. Operating revenue rose 2.7% to $5.53 billion.
Analysts, on average, had expected BCE to earn an adjusted 71¢ a share on revenue of $5.46 billion, according to Thomson Reuters I/B/E/S.