BCE Misses Profit, Sales Estimates as Subscriber Gains SlowHugo Miller
BCE Inc., 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. and Telus Corp.
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.
BCE shares rose 1 percent to C$45.93 at the close in Toronto. The stock has climbed 7.7 percent this year.
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.