BCE First-Quarter Profit Beats Estimates on New Customers

Updated on

BCE Inc., Canada’s biggest telecommunications company, posted first-quarter earnings that topped analysts’ estimates as it added contract customers.

Profit excluding certain items was 84 Canadian cents (70 U.S. cents) a share, Montreal-based BCE said Thursday in a statement. Analysts projected 78 Canadian cents, the average of estimates compiled by Bloomberg.

The company is snapping up market share as its largest competitor, Rogers Communications Inc., focuses on its higher-paying customers and spends less on promotions to add users. Wireless carriers are competing for more customers than usual because of a shift in regulation. In 2013, Canada’s government barred cancellation fees for contracts of longer than two years, meaning a plethora of contracts are expiring this year.

BCE, known by its brand name Bell, added 35,373 new wireless contract customers, while analysts had estimated 27,200 on average, according to a survey from Bloomberg First Word. Rogers reported last week it had lost 26,000 customers in the first quarter. Telus Corp., the country’s third-biggest carrier, reports next week.

“You’ve got Rogers losing share,” said David Heger, an analyst with Edward Jones & Co. in St. Louis. “I could see a repeat of last quarter where Telus and Bell both gain some share and Rogers has lost some,”

Wireless revenue increased 9.7 percent to C$1.64 billion from C$1.49 billion a year earlier. Average monthly revenue per customer was C$60.83, compared with estimates for C$60.74. Revenue at BCE’s media unit, which runs TV stations, was C$726 million compared with C$722 million last year.

BCE dropped 0.6 percent to C$53.80 at 9:58 in Toronto and have risen about 1 percent this year compared with 4 percent for the benchmark Standard & Poor’s/TSX Composite index.

BCE took a one-time charge of C$137 million in payments to Quebecor Inc. after a Quebec court ruled the company hadn’t done enough to stop its satellite signals from being pirated, to the detriment of Quebecor’s TV business.

“BCE is in the process of appealing that decision to the Supreme Court of Canada,” Siim Vanaselja, the company’s chief financial officer, said in a conference call today.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE