BCE 2Q Profit Jumps on Lower Costs, Expenditures

By Adriano Marchese

BCE profit rose by more than half thanks to lower operating and capital expenditure costs in the second quarter.

The Canadian telecom company on Thursday posted net earnings of 604 million Canadian dollars ($437.4 million), or C$0.59 a share, up from C$397 million, or C$0.37 a share, in the comparable quarter a year ago.

The company credits lower expenses, including lower severance expenses from layoffs, and a comparative period where it had booked a higher noncash loss for its share of an obligation to repurchase a minority interest in a joint venture a year prior.

BCE also had lower capital expenditures which was part of its planned reduction in capital spending and slowdown in its fibre network build-out.

Adjusted earnings were C$0.78 a share, just shy of analyst forecasts of C$0.79 a share, according to FactSet.

Operating revenues fell to C$6.01 billion from C$6.07 billion. Analysts were expecting for revenue to remain virtually unchanged at C$6.06 billion.

BCE cites a decrease of 8.7% in product revenue in the quarter, while service revenue remained unchanged.

The company added 4.4% more mobile phone activations in the quarter, for a total of 131,043. This included its highest quarterly prepaid net activations in nearly two years of 52,534 which was nearly four times higher.

Internet subscribers were 4.4% fewer at 23,841.

BCE has been focusing its efforts on its tech services and digital media. It said that in the quarter, its expansion into cloud services, security and managed automation helped drive its business solution services revenue growth by 22% this quarter.

It also noted that its momentum in 5G and internet-of-things B2B solutions supported a nearly-11% rise in net activations over a year ago.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

August 01, 2024 08:05 ET (12:05 GMT)

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