BCE Misses Profit, Sales Estimates as Subscriber Gains Slow
BCE Inc. (BCE), Canada’s second-largest wireless carrier, reported third-quarter profit and sales that missed analysts’ estimates as the company added fewer smartphone subscribers than predicted.
Excluding one-time charges and gains, earnings were 75 Canadian cents (72 cents) a share, the Montreal-based company said today, missing the consensus of 78 cents in a Bloomberg survey of analysts. Sales were C$5.1 billion, compared with the average analyst estimate of C$5.15 billion.
Chief Executive Officer George Cope is busy consolidating assets acquired in the C$3 billion purchase of Astral Media Inc. in July. Cope’s strategy has been to use programming from that and other recent acquisitions to offer a wider array of content with which he can lure digital TV and wireless customers away from rivals Rogers Communications Inc. (RCI/B) and Telus Corp. (T)
That was reflected in the growth of BCE’s average revenue per wireless user. The typical bill climbed 1.7 percent to C$58.30, the 15th straight quarter of gains, showing that customers are paying more for data.
Still, BCE added fewer wireless customers on long-term contracts than predicted last quarter. It gained 102,714, compared with a 124,500 estimate. That was in part because BCE offered fewer promotional packages and smaller smartphone subsidies, the company said. A government-mandated shift to two-year contracts from the traditional three-year plans also had an impact.
Rogers, based in Toronto, added 64,000 subscribers last quarter on that basis, also less than analysts predicted, and cited the two-year plan shift as a factor. Vancouver-based Telus, which reports its results tomorrow, is expected to add 104,000 contract subscribers.
Net income attributable to shareholders fell to C$343 million, or 44 cents a share, from C$527 million, or 68 cents, a year earlier. The decline was primarily due to the $230 million cost of “tangible benefits” obligations that Canada’s media regulatory agency demanded BCE pay before approving the Astral deal.
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