UPDATE 2-Canada's BCE posts lower profit, raises dividend

Thu Feb 4, 2016 10:47am EST
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(Adds details on operating performance, outlook, stock price)

By Alastair Sharp

TORONTO Feb 4 (Reuters) - BCE Inc, the Canadian telecommunications and media company, reported a drop in fourth-quarter profit as it paid more to win wireless business and for workers' severance, but raised its dividend and pointed to moderate growth in 2016.

Bell, as the company is known to customers, said on Thursday that wireless revenue grew 5.9 percent as it added 91,000 postpaid wireless customers, who typically spend more than those who prepay.

Wireless market leader Rogers Communications Inc said last week it added 31,000 such customers. Telus Corp , the country's third national wireless player, is due to report earnings on Feb. 11.

In the fourth quarter, Bell's wireless customers, on average, spent C$63.67 a month, although it paid more to court and retain them amid aggressive holiday promotions, versus C$59.16 for Rogers.

The Montreal-based company also added 74,000 Fibe TV customers and 39,000 high-speed Internet connections.

RBC Capital Markets analyst Drew McReynolds said the results and 2016 forecasts, including 1 percent to 3 percent revenue growth and adjusted earnings of C$3.45-C$3.55 a share, were largely in line with rising market expectations.

Fixed-line revenue declined 1.5 percent, but margins improved on cost-cutting. Its media unit reported a 3.4 percent gain in revenue, but margins were squeezed by rising content costs.   Continued...