BCE's Q1 Earnings Match Estimates, Revenues Decrease Y/Y

BCE Inc. BCE reported first-quarter 2024 adjusted earnings per share (EPS) of C$0.72 (53 cents) compared with C$0.85 in the prior-year quarter. The Zacks Consensus Estimate was pegged at 53 cents.

Quarterly total operating revenues decreased 0.7% year over year to C$6,011 million ($4,458.9 million). The consensus estimate was pegged at $4,468.4 million. This was driven by a 1.6% fall in Product revenues, which totaled C$819 million, and Service revenues declined 0.6% to C$5,192 million.

BCE, Inc. Price, Consensus and EPS Surprise

BCE, Inc. Price, Consensus and EPS Surprise

BCE, Inc. price-consensus-eps-surprise-chart | BCE, Inc. Quote

Segmental Results

The company announced that it combined its Bell Wireless and Bell Wireline operating segments to form a segment called Bell CTS. Going forward, the company will report its segment results under Bell CTS and Bell Media.

Bell CTS’ operating revenues increased 0.1% year over year to C$5,375 million, driven by strong service revenue growth.

Service revenues jumped 0.5% to C$4,556 million, driven by the ongoing expansion of mobile phones, mobile-connected devices and retail Internet and IPTV subscribers and increased sales of business service solutions to large enterprise customers. This was partly offset by the continued decline in legacy voice, data and satellite TV services and retention and bundle discounts on residential home services.

Product revenues were down 1.6% to C$819 million due to lower telecom data equipment sales to large enterprise customers.

Postpaid mobile phone net subscriber activations were 45,247, up 4.5% year over year. The number of postpaid mobile phone net subscriber activations increased owing to higher gross subscriber activations, continued 5G and multi-product bundling momentum, effective promotions and stronger Virgin Plus performance. This was partly offset by higher customer churn due to promotional offers on postpaid plans.

Prepaid mobile phone and net subscriber activations decreased owing to higher customer churn due to promotional offers on postpaid plans.

Bell Media generated revenues of C$725 million, declining 7.1% year over year. The revenues decreased due to lower subscriber revenues.

Other Details

Adjusted EBITDA in the reported quarter was C$2,565 million, up 1.1% year over year. The uptick was due to an increase of 1.7% in the CTS segment, partly offset by a decline of 11.4% in the media segment. The adjusted EBITDA margin was 42.7% compared with 41.9% in the prior-year quarter.

Cash Flow

BCE generated C$1,132 million of cash from operating activities compared with C$1,247 million in the prior-year quarter. The free cash flow remained the same year over year at C$85 million

2024 Outlook

BCE issued the financial guidance for 2024. It expects revenues to stay flat to grow 4% and adjusted EBITDA growth between 1.5% and 4.5%.

Free cash flow growth is projected to be in the range of (3)-(11)%. The annualized common dividend per share is estimated to be C$3.99.

Zacks Rank & Stocks to Consider

BCE currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader technology space are Badger Meter BMI, Pinterest PINS and Arista Networks ANET. Badger Meter sports a Zacks Rank #1 (Strong Buy), whereas Pinterest and Arista Networks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Badger Meter’s 2024 EPS has increased 9.9% in the past 60 days to $3.89. BMI’s long-term earnings growth rate is 15.6%.

Badger Meter’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 12.7%. BMI shares have risen 35.8% in the past year.

The Zacks Consensus Estimate for PINS’s 2024 EPS has remained constant in the past 60 days to $1.34. PINS’ long-term earnings growth rate is 20.1%.

Pinterest’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, delivering an average earnings surprise of 38.7%. Shares of PINS have gained 13% in the past year.

The Zacks Consensus Estimate for ANET’s 2024 EPS has increased 0.4% in the past 60 days to $7.49. ANET’s long-term earnings growth rate is 17.5%.

Arista Networks’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average earnings surprise of 13.3%. Shares of ANET have gained 62.7% in the past year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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