BCE Inc. Q4 Earnings Beats, Boosts Its Dividend

Dividend announcement is BCE Inc.’s (TSX:BCE) 14th increase to its annual common share dividend since Q4 2008, signifying rise of 107%

SmallCapPower | February 12, 2018: BCE Inc. (TSX:BCE) recently reported 4.6% YoY growth in operating revenue to $22.72 billion for FY2017, driven primarily by strong additions to its postpaid subscriber base, particularly in the fourth quarter, which saw the best sign-ups since Q4 2002. However, net earnings declined 3.8% to $2.97 billion and earnings per share (EPS) decreased 6.3% to $3.12 for FY 2017, due to continued investments in fiber optic and network expansion. For the fourth quarter of 2017, BCE’s operating revenue increased 4.5% YoY to $5.96 billion while net earnings fell 11.7% to $0.62 billion, or $0.64 per share, due to increased depreciation and interest expenses, higher severance, acquisition and other costs. Adjusted EBITDA increased 4.4% to $9.2 billion for FY 2017 and 4.5% to $2.2 billion for Q4 2017.

President and Chief Executive Officer of BCE Inc. and Bell Canada, George Cope, said, “Executing our strategy of broadband investment and innovation leadership, the Bell team welcomed more than 1.26 million new broadband wireless, TV and Internet customers in 2017, and 235,000 in an outstanding fourth quarter, to lead the Canadian communications industry. With 175,000 net new postpaid wireless customers in Q4 – a 56% increase and our best performance in 15 years – and rising customer satisfaction, it’s clear that customers are choosing Canada’s Best National Network in a highly competitive mobile marketplace. We achieved the largest share of new broadband Internet and TV customers, powered by our fast-growing all-fibre footprint – including our new Toronto fibre network and announcement today that we will roll out direct fibre links to homes and businesses throughout the GTA/905 region. Bell’s dedication to innovation has recently delivered the first Gigabit plus LTE wireless network capability, ongoing growth in new media platforms and content creation, the launch of Lucky Mobile for the growing low-cost mobile marketplace and rapid expansion into the Connected Home opportunity, including our integration of AlarmForce Industries.”

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For Q4 2017, BCE gained 175,204 net wireless postpaid customers, lost 16,690 net wireless prepaid subscribers; added 27,040 net high-speed Internet customers; increased 32,484 net IPTV customers, and lost 25,938 net satellite TV customers. At the end of 2017, BCE customer connections across all services grew by 5.5% as compared to last year and amounted to $22,109,711.

As part of the quarterly results, Bell reinforced its focus to be recognized by customers as Canada’s leading communications company through the execution of six strategic imperatives- Invest in Broadband Networks and Services, Accelerate Wireless, Leverage Wireline Momentum, Expand Media Leadership, Improve Customer Service, and Achieve a Competitive Cost Structure. Based on the above growth strategy, BCE has provided 2018 guidance, with revenue growth of 2%-4% and adjusted EPS of $3.42-$3.52. Additionally, BCE annualized common share dividend will increase 5.2%, or $0.15 per share, from $2.87 to $3.02 for 2018. The dividend announcement is the Company’s 14th increase to its annual common share dividend since Q4 2008, signifying rise of 107%.

BCE is a diversified organization with a commanding position in the wireless and wireline industry. Additionally, the Company has significant media assets, real estate holdings and a professional sports team. At the current price of $55.82, BCE provides investors with an attractive dividend yield of 5.4%.

Disclosure: Neither the author nor his/her family own shares in the company mentioned above.

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