Bell Canada – Media, Wireless Units Help BCE Boost Q4 Results

Bell Canada subsidiary of BCE Inc., registered a 1.3% uptick in wireless subscriber numbers and a 7.7% rise in its TV subscribers count

Bell Canada, formally known as BCE Inc. (TSE:BCE, market cap 36.35B, P/E 16.94, Div/yield 0.62/5.27, EPS 2.77, Shares outstanding 775.89M), has reported a 16.4% increase in adjusted earnings for the quarter to December and raised its dividend by 6%, citing a positive business outlook for 2014 underpinned by strong results from its media and wireless operations.

Bell Canada wireless subscriber numbers. Average revenue rose 2.1%.

Bell Canada registered a 1.3% uptick in wireless subscriber numbers. Average revenue per user rose 2.1%.

The company’s adjusted net quarterly earnings hit C$540 million, or C$0.70 adjusted earnings per share, up from C$0.60 a year earlier. On a non-adjusted basis BCE’s earnings slipped to C$495 million, or C$0.64 per share, from C$666 million, or C$0.86, in October-December 2012, due to the absence of a gain related to the transfer of spectrum.

BCE generated revenues of C$5.38 billion in the quarter, up from C$5.16 billion a year earlier. The figure was below analysts’ projections for revenues of C$5.41 billion.

Bell Canada, the wholly owned subsidiary of BCE Inc., registered a 1.3% uptick in wireless subscriber numbers and a 7.7% rise in its TV subscribers count. Its high-speed Internet subscriber base expanded by 3%, but the number of its landline customers bucked the trend, dropping by 6.6%.

73% of Bell’s long-term contracts subscribers now use smartphones. That’s up from 62% last year. Smartphones generate higher fees for Bell than regular cellphones. Average revenue per user rose 2.1%.

BCE’s quarterly figures were solid overall, with the size of the dividend increase and the relative strength of its landline operations being the two components that outstripped analysts’ projections.

The company will distribute a quarterly dividend of C$0.6175 per share. The higher amount reflects the expected increase in free cash flow and the brighter outlook for 2014.

BCE anticipates adjusted earnings in the range of C$3.10 to C$3.20 per share for 2014, in line with analysts’ forecasts. The company expects to see free cash flow improve by between 3% and 7% this year.

At current valuation levels, investors appear to have built in much of the anticipated growth in the near term outlook for the company.

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