Canada's largest telephone operator
) reported fourth-quarter 2012 adjusted earnings of 65 Canadian
cents per share (66 cents per ADS) missing the Zacks Consensus
Estimate by a penny. The results improved 4.8% from 62 Canadian
cents (63 cents per ADS) in the year-ago quarter, supported by
healthy growth in Fiber, 4G Long Term Evolution and cloud
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Revenue remained flat year over year at C$5.16 billion ($5.20
billion), but surpassed the Zacks Consensus Estimate of $5.18
billion. Strong performances in the Wireless, TV, Internet and
Media segments were offset by the weakness in the Wireline's
voice and data services.
For full-year 2012, BCE posted earnings per share of C$3.18
($3.21 per ADS), up 29.5% year over year. Revenues increased 2.5%
year over year to C$19.97 billion ($20.14 billion).
EBITDA grew 1.4% year over year to C$1.89 billion ($1.91 billion)
in the reported quarter fueled by strong contributions from Bell
Wireless and Bell Media.
Revenue from Bell Wireless increased 6.9% year over year to
C$1.44 billion ($1.45 billion). Higher service revenue (up 7.4%),
resulting from post-paid subscriber and wireless data revenue
growth coupled with better product revenue (up 2.3%) coming from
more smartphone sales boosted the results.
BCE added 105,005 net wireless subscribers during the reported
quarter, bringing the total to 7.68 million, up 3.4% year over
year. Post-paid net additions increased by 9.0% to 143,834, while
prepaid net losses slid 47.6% to 38,829 from the year-ago
quarter. Blended ARPU (average revenue per user) rose 4.1% year
over year to C$56.72 ($57.21) on the back of growing market share
plus more customers opting for mobile data services.
Churn rate (customer switch) improved to 1.7% from 2.0% in the
year-ago quarter. Post-paid churn was 1.3% compared with
1.5% in the year-ago quarter, while prepaid churn improved to
3.5% from 4.2% in the year-ago quarter due to lower customer
Revenues from Bell Wireline fell 3.7% year over year to C$2.61
billion ($2.63 billion) due to lower local and access (down
7.6%), long distance (down 12.8%) and equipment and other
revenues (down 6.3%).
Network access services (NAS) fell 7.5% year over year to 5.64
million. The decline was primarily due to strict competition from
wireless and IP-based technologies that prompted Bell to reduce
its access lines and digital circuits. Residential NAS losses
went down to 87,029 in the reported quarter compared with 89,733
in fourth quarter 2011. Business NAS losses were 36,641 against
13,947 in the year-ago quarter.
BCE activated 7,143 high-speed Internet customers compared with
just 1,091 customers in the year-ago period. TV subscriber
additions were 19,218, down 30.6% year over year. At the end of
the fourth quarter, TV subscribers grew 2.5% year over year to
Bell Media generated revenues of C$591.0 million ($596.1
million), up 2.2% year over year. The growth is attributed to
strong advertising and high subscriber revenues from specialty
sports and non-sports TV channels.
Revenues from this segment inched down 1.0% year over year to
C$694.0 million ($700.0 million), hurt by reduced local and
BCE exited 2012 with C$127.0 million (approximately $128.1
million) of cash and cash equivalents compared with C$174.0
million (approximately $175.5 million) in 2011. Capital
expenditure for BCE during the year was C$3.51 billion ($3.54
billion), up 8.0% year over year.
Among other foreign telecom firms,
) is expected to release its fourth quarter results on Feb 8,
Rogers Communications Inc.
) will release the same on Feb 15.
Another foreign stock worth considering is
Cellcom Israel Ltd.
) which carries a Zacks Rank #1 (Strong Buy).
BCE currently retains a Zacks Rank #3 (Hold). Looking ahead, we
expect the company to see faster growth in the wireless segment,
expand its position in the media market, enrich its broadband
networks and improve customer service.