BCE shares up despite lower earnings

BCE Inc. shares opened and closed higher after the company said its fourth-quarter adjusted earnings were 81 cents per share, down from 86 cents a year earlier but beating analysts' expectations of 77 cents.

Here are some of the key insights:

❚ Revenue fell 2.8 per cent to $6.1 billion, narrowly missing average analyst estimates as the pandemic continues to hit wireless service and product sales.

❚ Canada's largest telecommunications provider by market value added 92,928 postpaid wireless subscribers. Average billing per user fell 3.9 per cent to $64.71. Roaming, a critical source of revenue for telcos, fell as lockdown orders meant customers stayed at home.

❚ A decline in live sports broadcasting, crucial to the media division, was offset by subscriber growth in Crave, which holds Canadian streaming rights for HBO, Showtime and Starz. The company is cutting hundreds of jobs across its media division, including in television newsrooms and workers in administration and sales.

❚ BCE announced that it would devote $1 billion to $1.2 billion in capital investment to 5G infrastructure over the next two years and increase its dividend 5.1 per cent to $3.5 per share.

“These initiatives reflect our commitment to lead the build-out of Canada's next-generation digital infrastructure while also delivering increased dividend returns to the shareholders who have invested in Bell's strategy of broadband innovation and growth,” chief executive Mirko Bibic said.

❚ BCE forecast 2 per cent to 5 per cent revenue growth in 2021, compared with a 3.8 per cent decline in 2020.

“For the moment we have a stable regulatory environment that makes this type of large scale investment possible,” Bibic said Thursday during a conference call with analysts. “Now isn't the time for policy-makers and regulators to move away from encouraging network investment. Now is the time to collaborate and partner with government.”

Analysts expect the Canadian Radio-television and Telecommunications Commission to change a 2019 ruling that slashed how much internet service providers are allowed to charge resellers for access to their networks.

BCE shares closed at $56.05, up 2.13 per cent in Toronto.

BRENT LEWIN / BLOOMBERG BCE added 92,928 wireless customers in its fourth quarter as it reported lower earnings, but the company says it will be devoting up to $1.2 billion in capital investment to 5G infrastructure over the next two years.