Canada's BCE profit beats on wireless segment growth

Marco Green
February 10, 2019

BCE Inc. said a potential Canadian ban on telecommunications equipment from Huawei Technologies Co. won't affect its plans for capital expenditures or the timing of the rollout of 5G networks.

"We clearly recognize the issues at play, and we'll manage those appropriately going forward and of course, follow the law", said Cope, adding "We've made no selection yet of our 5G vendor" (via Bloomberg).

BCE's Bell Canada and rival Telus Corp. are the Canadian telecommunication companies most exposed if Trudeau decides to freeze out Huawei from the next-generation network.

Ottawa's 5G review comes at a tense time in diplomatic relations between Canada and China.

Canada's relationship with China has soured since the beginning of December when Canadian authorities arrested Huawei's global CFO Meng Wanzhou in Vancouver.

Do you think the level of scrutiny over Huawei is fair?

This would have the biggest impact on Bell and Telus, both of which are planning to use Huawei for future networks and extensively use it in existing networks, Shine wrote.

Prior to the conference call, BCE announced that it had 143,000 net subscriber additions in the fourth quarter, including 21,000 net additions to the Lucky Mobile pre-paid service that was launched in late 2017.

However, BCE chief financial officer Glen LeBlanc told analysts the wireless segment performed well in terms of subscriber profitability and cash generation.

BCE said adjusted EBITDA (which means earnings before interest, taxes, depreciation and amortization) increased by 2.8 per cent to $2.4-billion in the fourth quarter. Analysts, on average, estimated BCE would earn 87 cents per share.

The BELL MEDIA segment's operating revenue rose 1.9% to C$850 million, credited to ad revenue growth in the TV, outdoor, and digital sectors. BCE Inc. had an eight per cent decline in fourth quarter net income past year, as an asset writedown other expense increases offset higher revenue for the telecommunications and media company.

But profit fell 8 per cent to $642-million, or 68 cents per share, as the company recorded a $190-million non-cash impairment charge at its Bell Media division, saying that was due to revenue and subscriber "pressures" at its French-language television stations.

The company has also announced a 5% increase in its annualized common share dividend to $3.17/share/year, effective with first quarter 2019.

Other reports by Click Lancashire

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