Telecom giant BCE Inc. saw its quarterly profit jump 14.1%, driven by its wireless division with the increased use of smartphones and its media division which includes its CTV television assets.
BCE posted a $574-million profit, or 74 cents per common share, in the first quarter before adjustments, compared to $503 million, or 67 cents per share, in the same period last year.
The Montreal-based company’s adjusted profit was $580 million, up 6.8% from the same quarter in 2011.
“Our execution in the first quarter demonstrated a solid start to the year, highlighted by strong wireless performance, stabilizing business markets performance, continued competitive price discounting in residential wireline, and media results that delivered a strong contribution to earnings and cash flow,” chief executive George Cope said in a statement Thursday.
Canada’s largest telecom company had overall operating revenue of $4.9 billion, up 9.9% from $4.5 billion in the first quarter of 2011.
Analysts’ estimates compiled by Thomson Reuters put revenue at $4.96 billion.
In the quarter, Bell had 62,576 net postpaid subscribers. The figure is considered important because it represents a telecom company’s most valuable wireless customers and are an indicator of its competitive health.
“In Q1, we increased our smartphone customers and mobile data revenue significantly as we continued to roll out our new 4G LTE mobile network and enhance our industry-leading Bell Mobile TV service,” Cope said of BCE’s first quarter.
Bell said 52% of its postpaid subscriber base now uses smartphones.
In contrast, competitor Rogers Communications Inc. had postpaid wireless net subscriber additions of 47,000 in its first-quarter. Rogers said 60% of its postpaid subscriber base uses smartphones.
Bell Media’s division operating revenue was $512 million this quarter. The company said advertising revenues were supported by strong audiences in conventional and specialty TV channels, among other factors.
The telecom giant has been expanding its media business by leaps and bounds, including repurchasing broadcaster CTV Inc. in the second quarter of 2011, partnering with Rogers to buy Maple Leaf Sports and Entertainment and, most recently, announcing plans to acquire Astral Media for $3.4-billion. That deal is expected to go through by this fall.
BCE’s proposed acquisition of Astral Media aims to create a media powerhouse that would provide digital content to consumers online on their personal computers and tablets and on mobile devices like smartphones as well as traditional TV screens.
“We look forward to welcoming Montreal-based Astral Media to the Bell team later this year as Bell works to expand our media leadership, delivering the best content across the best networks to any broadband screens our customers choose,” Cope said.
He said Astral is expected to add to BCE’s cash flow and earnings after the deal closes, though in its forward-looking statements, BCE said it expects “a softer advertising market expected for Bell Media.”
