BCE’s Earnings Climb as Smartphone Data Spending Surges
BCE Inc., Canada’s second-largest wireless carrier, reported higher quarterly profit as customers spent more surfing the Web on premium devices like Apple Inc.’s iPhone. The company also raised its dividend.
Excluding severance, acquisition and other costs, earnings rose to 65 Canadian cents (65 cents) a share, the Montreal-based company said today in a statement. Profit was 1 cent below the average analyst estimate, according to data compiled by Bloomberg. BCE said it will increase its annual dividend to C$2.33 from C$2.27 a share, representing a boost of 60 percent since the fourth quarter of 2008.
Chief Executive Officer George Cope has made recent acquisitions to add programming to sell to users of the iPhone and of the BlackBerry Z10 mobile device, which went on sale in Canada this week. Buoyed by that fresh content, average revenue per wireless user at Bell Mobility, BCE’s mobile-devices business, rose 4.1 percent to C$56.72. That beat the average estimate of C$56.65 of six analysts in a Bloomberg survey.
The dividend increase was unexpected and shows “Bell is performing well in the current competitive environment,” said Maher Yaghi, a Desjardins Securities analyst in Montreal. He rates the stock a buy.
BCE fell 0.2 percent to C$44.43 at the close in Toronto. The stock rose less than 1 percent last year, as the S&P/Toronto Stock Exchange Composite Index gained 4 percent.
Cope told investors at a meeting in Toronto today that he’s “very confident” BCE will close its C$3.38 billion purchase of Astral Media Inc. in the middle of this year. Canada’s media regulator rejected the deal in October, saying it would concentrate too much power in BCE’s hands and curb competition. The company submitted an amended takeover plan in November.
BCE already owns broadcaster CTV and teamed up last year with rival Rogers Communications Inc. to buy a controlling stake in Maple Leaf Sports & Entertainment Ltd., which runs the National Basketball Association’s Toronto Raptors and the Toronto Maple Leafs hockey team.
Rogers, the largest Canadian wireless carrier, and No. 3 carrier Telus Corp. report fourth-quarter results on Feb. 15.
Bell Mobility added 143,834 customers on long-term contracts last quarter helped by what it said were “strong” sales of iPhones. The average analyst estimate was for a gain of 132,000. Mobile data revenue jumped 28 percent.
Revenue was little changed at C$5.16 billion in the quarter, compared with the C$5.17 billion estimate by analysts. BCE’s fourth-quarter net income rose 46 percent to C$708 million, or 91 cents a share, from C$486 million, or 62 cents, a year earlier.
BCE gave a sales forecast for the year of little changed at the low end to a gain of 2 percent at the high end. Earnings per share excluding some costs are expected to be C$2.97 to C$3.03, the company said.
Chief Financial Officer Siim Vanaselja told investors today that he doesn’t expect the company to make any share buybacks this year. The company’s increased dividend is payable April 15 to shareholders of record on March 15.
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