BCE profit beats due to Astral takeover, wireless growth

Tue May 6, 2014 8:06am EDT
 
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By Alastair Sharp

TORONTO (Reuters) - BCE Inc (BCE.TO: Quote) (BCE.N: Quote), Canada's largest telecommunications company, reported a better-than-expected adjusted profit, helped by the inclusion of results from TV and radio content producer Astral Media and strong growth in its wireless business.

BCE's net income attributable to shareholders rose to C$615 million ($561 million), or 79 Canadian cents per share, in the first quarter from C$566 million, or 73 Canadian cents per share, a year earlier.

On an adjusted basis, the company earned 81 Canadian cents per share. Operating revenue rose 3.7 percent to C$5.10 billion.

Analysts on average had expected earnings of 76 Canadian cents per share on revenue of C$5.12 billion, according to Thomson Reuters I/B/E/S.

But analyst Dvai Ghose of Canaccord Genuity said the earnings per share (EPS) included non-operating gains without which the company would have just missed estimates.

"Headline EPS beat is a little misleading, while strong wireline subscriber results are positive, wireline financials and wireless COA (cost of acquisition) were a little disappointing and media is a concern," he wrote in a note.

Montreal-based BCE, which operates under the Bell brand, maintained its revenue and profit forecast for 2014.

Bell said it added 33,964 net contract wireless subscribers in the three months to the end of March, compared to almost 60,000 in the same quarter a year ago. Bell and its biggest wireless rivals covet such customers, who sign multiyear contracts to use the latest smartphones and typically pay four times more each month than prepaid subscribers.   Continued...