Reports Q1 net earnings of $615 million, up almost 9%
The new wireless code of conduct is taking a bite out of the growth of the wireless business at BCE Inc., chief executive George Cope said Tuesday.
“The impact has been customers have moved to two-year contracts and as a result prices have moved up and that’s had some impact,” Cope told a conference call with financial analysts.
Bell added 33,964 postpaid net wireless customers, mostly smartphone subscribers on two-year contracts. That compared with 59,497 in the same quarter last year.
Cope noted the first quarter is traditionally a weaker quarter for wireless growth.
“From our business plan expectations, we were right on where we thought the quarter would be,” he said.
“Not seeing any incrementally new iconic handsets, obviously had some impact as well.”
The CRTC brought in a new wireless code of conduct in December, which eliminated three-year cellphone contracts. The changes included the right for consumers to cancel their wireless contracts after two years without cancellation fees. The new code also placed certain limits on roaming and excess data charges.
BCE reported Tuesday a first-quarter profit of $615 million or 79 cents per share, compared with $566 million or 73 cents per share in the same quarter a year ago, helped by growth in its wireless and media divisions.
Operating revenues grew 3.7% to $5.09 billion from $4.91 billion a year ago.
BCE President and CEO George Cope (CP)
Adjusted net earnings were $626 million or 81 cents per share, up from $599 million or 77 cents per share a year ago.
Analysts on average had expected a profit of 76 cents per share on $5.12 billion in revenue, according to data compiled by Thomson Reuters.
The Montreal-based company says higher revenue from its wireless, TV, Internet as well as other broadband services and media now deliver 83% of its revenues.
“Bell begins 2014 with solid first-quarter financial results that underline the operating momentum we have across our growth services, especially in wireless, residential wireline and media,” chief financial officer Siim Vanaselja said in a news release.
Bell’s revenues, which include wireless, TV and Internet and Bell Media, increased 4.4% to $4.5 billion, helped by the recent acquisition of pay and specialty TV company Astral Media.
Wireless revenues increased 4.5% to $1.47 billion in the quarter, from $1.40 billion last year.
Revenues for Bell Media, which includes TV and specialty TV channels, increased by 40.7% to $722 million thanks to higher advertising and subscriber fees from the Astral acquisition. Rate increases in specialty TV services and higher revenues from new mobile content deals also helped Bell Media’s revenues.
Revenues for subsidiary Bell Aliant decreased 1.2% to $676 million in the first quarter due to continued declines in local and long-distance phone customers and competition.
BCE Inc., which owns Bell Canada, CTV Inc. and other media and telecom companies, said its guidance targets outlined on Feb. 6 remain on track. Bell’s revenue growth is expected to range from two to four per cent for the year while BCE’s adjusted earnings-per-share is expected to be in the $3.10-$3.20 range.
As of March 31, BCE said it had 7.9 million wireless subscribers, up 1.2 per cent from a year ago. The number of Internet subscribers grew 3.4 per cent to 3.16 million.
Bell Fibe TV added 54,680 net new customers during the quarter, up 15.2 per cent. The company says its total number of TV subscribers rose 8.1 per cent to 2.52 million.
