BCE’s 1Q Earnings And Revenue Beat Estimates

BCE Inc. (BCE) reported its first-quarter financial results on April 29 before the opening bell. Canada’s largest telecommunications company reported a lower profit than a year ago but grew its revenue for the first time since the onset of the pandemic.

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BCE’s revenue came in at C$5.7 billion for the quarter ended March 31, an increase of 1.2% from C$5.6 billion in the prior-year quarter. It beat analysts’ estimates of C$5.63 billion. Operating revenues totaled C$5.71 billion, up from C$5.64 billion a year ago.

Net earnings attributable to common shareholders was C$642 million (C$0.71 per share) in 1Q 2021 compared to earnings of C$680 million (C$0.75 per share) in 1Q 2020. Adjusted EPS was C$0.78, beating consensus by C$0.04. But it is 1.3% lower than a year ago.

The company’s mobile phone customer base increased 2.2% year-over-year to 9,166,748 with 8,361,264 postpaid and 805,484 prepaid customers. The average billing per mobile phone user fell 3.4% to C$70.34.

President and CEO Mirko Bibic said, “The speed and quality of our networks, the exclusive services that leverage them and our team’s commitment to champion customer experience helped grow Bell’s broadband market share in Q1 with 108,468 net new mobile, retail Internet, and IPTV customers – a 51% increase over Q1 last year – alongside continued leadership in traditional and digital media platforms.”

BCE and Bell Canada CFO Glen LeBlanc said, “As we re-confirm our guidance targets for 2021. Bell is well-positioned to execute our network acceleration plans, including participation in the upcoming federal 5G spectrum auction, while delivering sustainable dividend growth to our shareholders.”

BCE’s board of directors has declared a quarterly dividend of $0.875 per common share. (See BCE stock analysis on TipRanks)

Two days ago, RBC Capital analyst Drew Mcreynolds reiterated a Hold rating on the stock but raised its price target from C$58.00 to C$59.00 (1.5% upside potential).

After the CRTC ruled that large wireless carriers, including BCE, Rogers, and Telus, must resell access to their networks to smaller players, Mcreynolds wrote in a report, “We view this decision as ‘constructive enough’ and manageable for national operators while at the same time ‘extending a helping hand’ to existing regional wireless operators.”

The rest of the Street is cautiously optimistic about BCE with a Moderate Buy consensus rating based on 3 Buys and 4 Holds. The average analyst price target of C$59.68 implies an upside potential of about 2.6% to current levels.