Canada's leading telephone operator
) reported fourth-quarter 2013 adjusted earnings of 70 Canadian
cents per share (63 cents per ADS), missing the Zacks Consensus
Estimate of 65 cents. The results however, improved 16.7% from 60
Canadian cents (65 cents per ADS) in the year-ago quarter owing
to a higher EBITDA at Bell.
Revenues came in at C$5.38 billion ($4.86 billion), also
missing the Zacks Consensus Estimate of $5.21 billion. Strong
performances by the Wireless and Media segments were offset by
the weakness in Wireline voice and data services.
For full-year 2013, BCE posted earnings per share of C$2.99
($2.69 per ADS), up 1% year over year. Revenues increased 2.1%
year over year to C$20.40 billion ($18.36 billion).
EBITDA grew 5.4% year over year to C$2.00 billion ($1.8
billion) in the reported quarter fueled by strong contributions
from Bell Wireless and Bell Media.
Revenues from Bell Wireless increased 3.2% year over year to
C$1.51 billion ($1.35 billion). Higher service revenues (up
3.7%), resulting from post-paid subscriber growth coupled with
wireless data revenue growth (up 15.2%) and better blended ARPU
boosted the results.
BCE added 93,700 net wireless subscribers during the reported
quarter, bringing the total to 7.78 million, up 1.3% year over
year. Post-paid net additions decreased by 16.9% from the
year-ago quarter to 119,520. Blended ARPU (average revenue per
user) rose 2.1% year over year to C$57.92 ($52.13) on the back of
increasing post-paid subscribers in wireless customer base plus
more subscribers opting for mobile data services.
Churn rate (customer switch) improved to 1.6% from 1.7% in the
year-ago quarter. Post-paid churn remained unchanged year
over year at 1.3%, while prepaid churn improved to 3.4% from 3.5%
in the year-ago quarter reflecting increased investments in
customer service and retention.
Revenues from Bell Wireline fell 0.3% year over year to C$2.60
billion ($2.34 billion) due to lower local and access (down
6.6%), long distance (down 10.5%) and equipment and other
revenues (down 6.3%).
Network access services (NAS) fell 7.1% year over year to 5.24
million. The decline was primarily due to competition from cable
operators and substitution of the service wireless and IP-based
technologies. Residential NAS losses during the quarter were
63,281 compared with 87,029 in the fourth quarter of 2012.
Business NAS losses were 32,478 against 36,641 in the year-ago
BCE activated 15,690 high-speed Internet customers compared
with 7,269 in the year-ago period. TV subscriber additions were
36,189, up a whopping 88.3% year over year. At the end of the
fourth quarter, TV subscribers grew 5.7% year over year to 2.28
Bell Media generated revenues of C$821.0 million ($738.9
million), up 38.9% year over year. The growth is attributed to
strong advertising and high subscriber revenues from the Astral
acquisition along with higher rates paid by broadcasters for Bell
Revenues from this segment dropped 0.8% year over year to C$688.0
million ($619.2 million), as improvement in Internet and TV
services were hurt by reduced local and long-distance
BCE exited 2013 with C$335.0 million (approximately $301.5
million) of cash and cash equivalents compared with C$129.0
million (approximately $116.1 million) in 2012. Capital
expenditure for BCE during the year was C$3.57 billion ($3.21
billion), up 1.6% year over year.
BCE's board of directors declared a quarterly dividend of
$0.6175 ($0.5557) per common share payable on April 15, 2014 to
shareholders of record at the close of business on Mar 14. This
will translate into an annual dividend of $2.47 ($2.22)
reflecting a hike of 6%.
For 2014, BCE expects EPS of C$3.10-$3.20 while free cash flow
growth will be around 3-7%. Annual dividend per share will be
$2.47 reflecting a dividend payout policy of 65-75%. Excluding
Bell Alliant, revenue growth for Bell is expected around 2-4%,
while EBITDA growth is estimated at around 3-5%. Capital
intensity projection for Bell is around 16-17%.
Among other foreign telecom firms,
) is expected to release its fourth quarter results on Feb 13,
Rogers Communications Inc.
) will release the same on Feb 12.
Another foreign stock worth considering is
China Unicom Hong Kong Limited
) which carries a Zacks Rank #1 (Strong Buy).
The company displays a robust wireless business model,
improving wireline operations and expanding activities in the
media sector. However, stiff competition, continued decline in
network access services, constant need to invest in technology
and union issues remain the primary concerns for the company. BCE
currently retains a Zacks Rank #4 (Sell).
BCE INC (BCE): Free Stock Analysis Report
CHINA UNICOM (CHU): Free Stock Analysis
ROGERS COMM CLB (RCI): Free Stock Analysis
TELUS CORP (TU): Free Stock Analysis Report
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