TORONTO (Reuters) - BCE Inc BCE.TO BCE.N, 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.
The average monthly bill of a Bell wireless customer was C$57.90, a rise of 3.5 percent.
By comparison, market-leader Rogers Communications Inc RCIb.TO last month said it added just 2,000 net postpaid wireless customers and its average wireless customer, a blend of contract and prepaid subscribers, paid C$57.63 a month.
BCE has been creeping up on Rogers in the wireless market. It has also been strengthening its position as a leading media company with several large acquisitions.
But the company late last year lost out to Rogers on the rights to broadcast National Hockey League games starting with the 2014/15 season, its first major media disappointment after buying Astral in mid-2013 and CTV in 2011.
Bell Media’s operating revenue rose about 41 percent to C$722 million, helped by higher advertising and subscriber fee revenues from Astral, which it bought for about C$3 billion.
Operating revenue in the Bell wireless unit rose 4.5 percent to C$1.47 billion as postpaid subscribers made up a larger share of its customer base.
Bell said it also added 15,627 landline Internet customers and 54,680 customers signed up to Fibe TV, which BCE runs over its Internet network. That number was offset by more than 26,000 losses from satellite TV.
Fibe TV’s growth has helped offset a long-term decline in the number of people with a landline telephone connection.
BCE’s shares, which have risen about 8 percent in the last six months, closed at C$48.96 on Monday on the Toronto Stock Exchange.
Additional reporting by Ashutosh Pandey; Editing by Ted Kerr, Don Sebastian and Chizu Nomiyama