BCE Revenue Recovers as Covid Measures Ease, Stores Reopen

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BCE Inc. said revenue bounced back in the third quarter, rising 8% from the second quarter as Covid-19 restrictions were relaxed and stores were able to open again.

Revenue of C$5.79 billion ($4.4 billion) was down 2.6% compared with 3Q of last year, but beat analyst estimates for C$5.65 billion.

Key Insights

  • The Montreal-based company added 128,168 new wireless subscribers, with 87,529 of them postpaid. Average billing per user fell 6% to C$65.74, hit by the pandemic: With fewer people traveling, there’s less roaming revenue.
  • Profitability declined. Adjusted earnings were 79 Canadian cents per share, which was slightly better than analyst expectations for 77 cents, but was down from 91 cents a year earlier.
  • BCE’s media business continued to suffer from a hit to advertising revenue, though things improved in the quarter with the return of major live sports. Media operating revenue was down 16.4% compared with last year. One bright spot was its Crave streaming service, which saw a 3% rise in subscribers.
  • The race is on in Canada to provide users with the latest technology, and BCE is spending more as a result. Four months ago, Bell launched 5G in five major regions, including Toronto and Vancouver. In the quarter, the company’s capital intensity ratio was 17.8%, up from 17% in the 3Q last year.
  • The quarter “was all about building momentum back into the business and delivering the consistent results we said we would deliver despite Covid,” Chief Executive Officer Mirko Bibic said in a conference call with analysts Thursday morning.
  • Bibic also praised the federal government’s move to regulate streaming companies, such as Netflix Inc. and Walt Disney Co. “The recognition that there needs to be a level playing field in Canadian broadcasting as between our domestic players, large and small, and global internet giants is a very important principle,” he said, noting that the company has been asking for it “for a long time.”

Market Reaction

  • BCE shares rose 0.3% to C$54.57 at 9:34 a.m. in Toronto. They were down 9.6% this year through Wednesday’s close.

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