BCE Inc. BCE reported third-quarter 2024 adjusted earnings per share (EPS) of C$0.75 (55 cents) compared with C$0.81 in the prior-year quarter. The Zacks Consensus Estimate was pegged at 57 cents.

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Quarterly total operating revenues dipped 1.8% year over year to C$5,971 million ($4,377 million). The consensus estimate was pegged at $4,450 million. The decline is attributed to a 14.3% fall in Product revenues, which totaled C$685 million, amid 0.1% growth in Service revenues, which came in at C$5,286 million. 

In response to the results, BCE’s shares tanked 2.3% and closed the trading session at $28.07 on Nov. 7.

Segmental Results

The company has combined its Bell Wireless and Bell Wireline operating segments to form a segment called Bell CTS. BCE now reports its segment results under Bell CTS and Bell Media.

Bell CTS’ operating revenues went down 3.3% year over year to C$5,280 million due to soft demand trends in product and service revenues.

Within the Bell CTS segment, Service revenues fell 1.4% to C$4,595 million, hurt by ongoing declines in legacy services but bolstered by growth in mobile phone and business solutions services. 

Product revenues plunged 14.3% to C$685 million due to lower consumer electronics revenues from The Source. Also, lower demand for consumer electronics, fewer mobile device sales and reduced telecom equipment sales to large business customers contributed to the decrease.

BCE, Inc. Price, Consensus and EPS Surprise

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

Postpaid mobile phone net subscriber activations were 333,111, down 76.8% year over year. The number of postpaid mobile phone net subscriber activations decreased due to rising mobile phone postpaid customer churn owing to growing competitive market activity and promotional offers on postpaid plans.

Prepaid mobile phone net subscriber activations were 69,085 up 187.3% year over year. The primary driver behind the expansion was an 18.7% rise in gross activations due to augmented retail distribution and effective Lucky Mobile marketing strategies coupled with a lower customer churn rate, which jumped 44 basis points to 4.66%.

Bell Media revenues grew 10.1% year over year to C$782 million, primarily driven by a 19% surge in digital revenues. Its strategy to enhance its digital footprint included acquiring OUTEDGE Media Canada and bringing NBCUniversal channels like USA Network and Oxygen True Crime to the Canadian market. With subscriber revenues up by 13.5%, Bell Media continues to capture market share in streaming, solidifying Crave’s reputation as a prime destination for premium content.

Other Details

Adjusted EBITDA in the reported quarter grew 2.1% to C$2,722 million. This increase, along with a cost-cutting strategy that drove a 4.8% reduction in operating expenses, brought BCE to its highest adjusted EBITDA margin in more than 30 years. The adjusted EBITDA margin improved to 45.6%, up from 43.9% in the prior-year quarter.

Cash Flow

BCE generated C$1,842 million of cash from operating activities compared with C$1,961 million in the prior-year quarter. The free cash flow was C$832 million compared with C$754 million a year ago due to higher cash flows from operating activities.

BCE Revises 2024 Revenue Guidance

Due to lower-than-expected product revenues and ongoing wireless pricing pressures, BCE revised its 2024 revenue guidance from 0-4% growth to a decline of about 1.5%.  

Despite the revised guidance, management reiterated all other financial targets for 2024. It continues to anticipate adjusted EBITDA growth between 1.5% and 4.5%. Free cash flow growth is projected to be in the band of (3)-(11)%. The annualized common dividend per share is estimated to be C$3.99.

BCE’s Zacks Rank

BCE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Itron Inc ITRI reported non-GAAP EPS of $1.84 for third-quarter 2024, which beat the Zacks Consensus Estimate by 62.8%. The company reported earnings of 98 cents in the prior-year quarter.

Shares of ITRI surged 77% in the past year. 

Watts Water Technologies, Inc. WTS reported third-quarter 2024 adjusted EPS of $2.03 compared with $2.04 in the prior-year quarter. The bottom line topped the Zacks Consensus Estimate by 2%.

Shares of WTS have gained 5.2% in the past year. 

Western Digital Corporation WDC reported first-quarter fiscal 2025 non-GAAP earnings of $1.78 per share, surpassing the Zacks Consensus Estimate by 2.3%. The company incurred a loss of $1.76 per share in the prior-year quarter.

Shares of WDC have gained 51.1% in the past year. 

 

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