BCE Inc. attracted thousands of new wireless subscribers in the second quarter, but declines in its landline business dragged down the telecom giant’s profits as it prepared for the $52-billion sale to a private equity consortium.
Bell’s wireless division had 83,000 total net new customers in the quarter, raising its total wireless subscriber base to 6.3 million, which is 7.6% higher than in the same time a year earlier.
“This was a quarter of strong progress against our strategic imperatives, especially the significant acceleration of our wireless business,” president and CEO George Cope said in a statement.
BCE’s overall quarterly profit fell to $361 million from a year-ago $667 million, when it had a series of one-time gains, including $267 million from the sale of Aliant Directory Services and a favourable tax settlement.
The Bell Canada parent said Wednesday its second-quarter earnings amounted to 45 cents per share, versus 83 cents per share in the same period a year before.
Excluding restructuring charges and other items in both quarters, BCE reported earnings of $425 million, 53 cents per share, compared with $445 million, 56 cents per share in 2007.
Analysts had forecast earnings of 56 cents per share in the period.
Despite improvement in its wireless operations, operating revenue remained flat at around $4.4 billion for the quarter ended June 30, mostly due to lack of revenue from its Telesat satellite division, which sold last year for $3.25-billion.
National Bank Financial analyst Greg MacDonald said BCE’s revenues were slightly better than expected as the company focused on retaining customers on the higher margin, post-paid side of its wireless business.
“Cope’s influence is being felt with respect to a greater focus on customer attention,” MacDonald said.
“I don’t think anyone really doubted that they could get the wireless business back on track. The question is, can it be sustained?”
There were 10.7% fewer losses in Bell’s residential local telephone line business in the quarter, but the company saw 1,000 Internet subscribers abandon Bell, likely heading to cable. Cope said the company is working to improve the performance in the second half of the year.
Bell is being privatized by an investment group led by the Ontario Teachers Pension Plan Board and several U.S. partners—a $52-billion cash and debt deal which is the biggest takeover in Canadian history. The transaction is expected to close in December.
