BCE’s Q2 Profit Beats Estimates

BCE Inc. (BCE) reported its second-quarter financial results on August 5 before the opening bell. Canada’s largest telecommunications company reported a profit almost three times higher than a year ago.

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Total operating revenue came in at C$5.7 billion for the quarter ended June 30, an increase of 6.4% from C$5.4 billion in the prior-year quarter. It is slightly below analysts’ estimates of C$5.73 billion. BCE saw strong year-over-year growth in Wireless, Residential Internet, and Media.

Net earnings attributable to common shareholders nearly tripled to C$685 million (C$0.76 per share) in Q2 2021, from C$237 million (C$0.26 per share) in Q2 2020.

Meanwhile, adjusted EPS was C$0.83, up 31.7% from C$0.63 a year ago. It beats consensus by C$0.04.

The company added 44,433 new postpaid mobile phone subscribers, compared to a net loss of 960 in Q2 2020. Average billing per mobile phone user rose 3.3% to C$72.21.

BCE president and CEO Mirko Bibic said, “The Bell team successfully delivered on our growth strategy in Q2 with strong execution across all of our operating segments. A year after COVID-19’s initial impacts in early 2020, we’ve achieved strong, sequential improvement in total customer net additions; increased consolidated revenue and adjusted EBITDA more than 6%, with leading growth in wireless service revenue and ABPU; and further accelerated capital spending to drive the next-generation networks and service innovations critical to Canada’s recovery and long-term economic growth.

“Canadians are continuing to embrace the power of our next-generation networks like 5G and Bell pure fibre, reflected in a 12% increase in residential Internet revenue; a 75% increase in total retail Internet, IPTV, and mobile phone and connected device net subscriber additions; and the ongoing introduction of exclusive digital media platform and service innovations.”

BCE is on track to cover 70% of the national population with 5G service by the end of the year. (See BCE stock charts on TipRanks)

Two days ago, TD Securities analyst Vince Valentini reiterated a Buy rating on BCE but raised its price target to C$66.00 (from C$63.00). This implies 4.3% upside potential.

Consensus among TipRanks analysts is a Moderate Buy rating based on four Buys and three Holds. The average BCE price target of C$64.20 implies an upside potential of about 1.8% to current levels.

TipRanks’ Smart Score

BCE scores a 6 out of 10 on the TipRanks Smart Score rating system, indicating that the stock returns are likely to be in line with the overall market.