BCE's profit misses as it pays more to win wireless customers
By Alastair Sharp
TORONTO (Reuters) - BCE Inc (BCE.TO: Quote), Canada's largest telecommunications company, reported a slightly smaller-than-expected quarterly profit as it paid more to win wireless customers and forecast a 2017 profit below analysts' estimates, sending its shares lower.
The Montreal-based company forecast adjusted earnings of C$3.42–C$3.52 per share for the year, lower than analysts' average estimate of C$3.62, according to Thomson Reuters I/B/E/S.
The company, popularly known as Bell, said its outlook counted a 7 cent per share weight from regulatory rulings that include forcing it to lower wholesale internet rates it can charge rivals and stopping it from substituting Canadian ads into the broadcasts of U.S. networks during Sunday's Super Bowl.
It also excluded any contribution from its C$3.1 billion deal to buy Manitoba Telecom Services Inc, which the company expects to close by the end of the first quarter.
The company said likely free cash flow growth of between 3 percent and 7 percent in 2017 gave it confidence to raise its dividend by 5.1 percent to C$2.87.
Its shares were down 1.5 percent at C$57.50 in midday trade.
The company said it added 112,393 net postpaid wireless customers, up from 91,308 a year earlier. However, its cost of acquisitions rose 3 percent to C$541 per subscriber, partly because a weak Canadian dollar pushed up handset costs.
Rival Rogers Communications Inc (RCIb.TO: Quote), added 93,000 of those high-value subscribers in the same period. The third national wireless provider, Telus Corp, will report results on Feb. 9. Continued...