BCE Rises to Pre-Pandemic Levels as Profit Beats Forecasts

(Bloomberg) -- BCE Inc. shares rose as much as 1.7% to their highest level since March 2020 after the telecommunications company said second-quarter profit beat analysts’ forecasts.

Revenue was up 6% to C$5.7 billion ($4.5 billion), close to analysts’ average estimates of C$5.73 billion. The result comes as governments across Canada relax Covid-19 restrictions, with 81% of the eligible population having received at least one dose of a vaccine, according to CTV News.

Key Insights

• The Montreal-based company added 44,433 new postpaid mobile phone subscribers. Average billing per mobile user rose 3.3% to C$72.21.
• Adjusted earnings were 83 Canadian cents per share, versus the average analyst estimate of 79 cents.
• “BCE’s growth is poised to move higher this year, in our view, as wireless revenue rises on subscriber growth and higher transaction rates now that its stores have reopened,” Bloomberg Intelligence analyst John Butler said. “BCE is also lapping easy year-ago comparisons, while high-margin roaming fees may rebound as travel resumes.”
• The company recently committed C$2.1 billion to buy licenses for 5G wireless airwaves, the second-highest figure after rival Rogers Communications Inc. The auction for 3,500 MHz spectrum drew in over C$8.9 billion, far more than analysts expected.
• “Continued healthy free cash flow and Bell’s overall strong financial position are enabling our historic network acceleration in every region, supported by public policy encouraging next-generation infrastructure investment,” Chief Executive Officer Mirko Bibic said in a statement.

Market Reaction

• BCE shares were up nearly 14.6% this year as of Wednesday’s close, behind the 16.6% gain of the S&P/TSX Composite Index. They were up about 1.2% to C$63.13 at 9:43 a.m. in Toronto.

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