BCE Inc. is reporting slightly higher operating revenue but a decline in profits compared with the second quarter of last year, when the company’s bottom line was helped by a favourable tax item.
The Montreal-based owner of Bell, CTV Inc. and other major Canadian media and telecom operations, says it had $571 million of net income attributable to common shareholders, or 74 cents per common share in the second quarter.
That was down from $732 million or 94 cents per common share a year earlier.
BCE’s adjusted earnings also fell, dropping to $594 million or 77 cents per common share – down from $747 million or 97 cents per share in the second quarter of 2012.
Last year’s second-quarter profit was boosted by a tax issue in the company’s favour.
The second-quarter report issued on Thursday included fresh guidance about how BCE expects to perform financially, including impacts from its acquisition of Astral Media.
The company now expects Bell’s revenue growth over 2012 will be between two and 4%, up from between 0-2%.
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However, BCE expects no change to its adjusted earnings per share, which is anticipated to be between $2.97 and $3.03 per share this year.
BCE had “solid” financial results in the second quarter, backed by strength in its wireless network, media sector and progress in its wireline operation, said Siim Vanaselja, the chief financial officer for BCE and Bell.
“Our successful closing of the acquisition of Astral supports the increased 2013 financial guidance we’re announcing today. After absorbing integration and other acquisition-related costs in the second half of 2013, we expect to begin realizing the full financial benefits of this acquisition in 2014 with strong free cash flow accretion to support our dividend growth objective.”
Operating revenue at BCE’s main subsidiary, Bell, rose 1.9% to $4.42 billion for the three months ended June 30 from $4.34 billion a year earlier.
BCE and Canada’s other larger wireless companies recently called on the federal government to change its policy on foreign ownership of Canadian wireless communications networks.
They have said they have been put at an unfair disadvantage by a federal policy that allows foreign carriers to buy small Canadian wireless carriers while denying the big domestic carriers the same opportunities.
BCE has said the policy may have been intended to help small startup companies but the rules have had unintended negative consequences for the large domestic companies.
The complaints come amid reports that U.S.-based Verizon Communications is exploring a move into the Canadian market by purchasing two of the new wireless carriers that launched their services a few years ago
Last month, BCE closed its $3.4-billion purchase of Astral Media.
The broadcast regulator signed off a revised version of the deal on the condition Bell sell a number of Astral’s English and French specialty TV channels, including the Cartoon Network, Disney DX and Teletoon, along with some of its English-language radio stations.
BCE is Canada’s largest communications company, and a longtime staple in investment portfolios that are designed to benefit from steady-growth companies with a solidly dependable dividend.
The telecom giant has been expanding its media business by leaps and bounds, including repurchasing broadcaster CTV Inc. and buying a large stake in Maple Leaf Sports and Entertainment _ owner of Toronto’s major league hockey, basketball and soccer teams, among other things.
