BCE Inc. BCE reported fourth-quarter 2024 adjusted earnings per share (EPS) of C$0.79 (56 cents) compared with C$0.76 in the prior-year quarter. The Zacks Consensus Estimate was pegged at 50 cents.

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Quarterly total operating revenues dipped 0.8% year over year to C$6,422 million ($4,590 million). The consensus estimate was pegged at $4,469 million. The decline is attributed to a 1.1% fall in Service revenues, which totaled C$5,287 million, amid 0.9% growth in Product revenues, which came in at C$1,135 million. 

In response to the weak revenue performance, BCE stock tanked 5.5% and closed the trading session at $23.52 on Feb.6. It also went down 1.6% in the pre-market trading on Feb. 7. Shares of the company have plunged 40.3% in the past year compared with the industry's decline of 15.2%.

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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 1.1% year over year to C$5,681 million due to soft demand trends in service revenues, offset by increased product sales.

Within the Bell CTS segment, Service revenues fell 1.6% to C$4,546 million due to lower revenues from legacy voice, data and satellite TV, higher discounts on residential services, and a fall in mobile phone ARPU. However, growth in mobile, Internet and IPTV subscribers, stronger enterprise service sales and acquisitions like Stratejm, CloudKettle and HGC Technologies helped offset some losses.

Product revenues inched up 0.9% to C$1,135 million, driven by higher land mobile radio sales to government enterprises and more sales of premium mobile phones. This was partly offset by lower consumer electronics revenues due to store closures and conversions to Best Buy Express under its Best Buy Canada partnership. 

BCE, Inc. Price, Consensus and EPS Surprise

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

Postpaid mobile phone net subscriber activations were 56,550, down 56.1% year over year. The decline was due to 9.5% fewer new activations, adversely impacted by slower population growth from immigration policies and reduced sales from The Source store conversions to Best Buy Express. Higher postpaid churn in the prior-year quarter led to fewer net adds due to stronger competition and promotions.

Prepaid customer base fell by 5,480 in the fourth quarter, improving from a 36,630 loss in the prior-year quarter. This was due to a 15% rise in activations from expanded retail distribution, while churn stayed at 6.15%.

Bell Media revenues grew 1.2% year over year to C$832 million, boosted by higher advertising and subscriber revenues. Total digital revenue rose 6%, driven by strong digital ad growth from Bell Media’s programmatic marketplace and increased Crave and sports streaming subscribers.

In 2024, digital revenues made up 42% of Bell Media's total revenues, rising from 35% in 2023.

Other Details

Adjusted EBITDA in the reported quarter grew 1.5% to C$2,605 million. The uptick was due to an increase of 0.7% in the CTS segment and 14.2% in the media segment. The adjusted EBITDA margin was 40.6% compared with 39.7% in the prior-year quarter.

Cash Flow

BCE generated C$1,877 million of cash from operating activities compared with C$2,373 million in the prior-year quarter. The free cash flow was C$874 million compared with C$1,289 million a year ago due to lower capital expenditures.

2025 Outlook

BCE expects revenues and adjusted EBITDA to be adversely impacted by pricing pressure, lower subscriber growth, reduced wireless sales and higher media costs. For 2025, management anticipates revenue growth of (3%)-1%. Adjusted EBITDA is expected to grow in the (2%)-2% band. 

For 2025, BCE also expects lower capital spending to boost free cash flow, in the range of 11-19% growth. The annualized common dividend per share is estimated to be C$3.99.

Adjusted EPS growth is likely to range between (13%) and (8%).

BCE’s Zacks Rank

BCE currently carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

PTC Inc PTC reported first-quarter fiscal 2025 non-GAAP EPS of $1.10, beating the Zacks Consensus Estimate by 20.9%. The company reported non-GAAP EPS of $1.11 in the prior-year quarter. 

In the past year, shares of PTC have declined 4.8%.

CDW Corporation CDW reported fourth-quarter 2024 non-GAAP EPS of $2.48, beating the Zacks Consensus Estimate of $2.33. However, the bottom line contracted 3.5% year over year.

In the past year, CDW shares have declined 15.9%.

Western Digital Corporation WDC reported second-quarter fiscal 2025 non-GAAP earnings of $1.77 per share, surpassing the Zacks Consensus Estimate of $1.75. The company incurred a loss of 75 cents per share in the prior-year quarter. 

Shares of WDC have gained 11.3% in the past year.

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