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BCE Acquires Distributel to Boost Internet Services in Canada

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BCE Inc’s (BCE - Free Report) Canada-based subsidiary, Bell has announced a strategic acquisition of an independent communications provider – Distributel. The details of this transaction are not disclosed by the companies. The buyout transaction remains subject to regulatory approval.

After the acquisition is finalised, Distributel will continue to function independently, with its operations being overseen by CEO Matt Stein.

Bell plans on investing nearly $14 billion, almost $2 billion more than originally planned, as part of the company’s 2020-2022 capital investment program in Canada. With Distributel’s acquisition, BCE plans to expand its reach in the Canadian markets by providing resilient network connectivity from coast to coast.

BCE, Inc. Price and Consensus

BCE, Inc. Price and Consensus

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

Distributel plans on further expanding its market share in the Internet services segment as well as improve customer experience and product offerings by leveraging Bell’s resources and technology.

In February 2022, Bell announced the acquisition of EBOX, an Internet, telephone and television service provider. Per the deal, Bell will maintain the EBOX brand and operations, whereas EBOX will continue providing leading telecommunications services in Quebec and parts of Ontario.

BCE provides wireless service, data communications, telephone and high-speed Internet to small and medium businesses. The company continues to invest heavily in pure fibre and 5G network to support Canada’s economic recovery from the pandemic.

Recently, Bell announced the expansion of pure fibre Internet service to homes and businesses in Manitoba. The network features download speeds of 1.5 Gbps so that users can enjoy high-quality video streaming and conference calls.

Prior to that, the company announced the expansion of pure fibre Internet service to approximately 117,000 homes and businesses in Ontario which is a part of the company’s Ontario Accelerated High Speed Internet Program.

The company reported second-quarter 2022 adjusted earnings per share of C$0.87 (68 cents) compared with C$0.83 in the prior-year quarter. The Zacks Consensus Estimate for the same was pegged at 65 cents.

Quarterly total operating revenues moved up 2.9% year over year to C$5,861 million ($4,593 million). The consensus estimate was pegged at $4,530 million.

Bell Wireless’ operating revenues increased 5.5% year over year to C$2,246 million, driven by strong service revenue growth and higher year-over-year revenues from international roaming.

BCE currently has a Zacks Rank #3 (Hold). Shares of the company have lost 7.9% in the past year compared with the industry’s fall of 5.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the broader technology space are Cadence Design Systems (CDNS - Free Report) , Badger Meter (BMI - Free Report) and Arista Networks (ANET - Free Report) . Badger Meter and Arista Networks each sport a Zacks Rank #1 (Strong Buy), whereas Cadence Design Systems carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.

Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have jumped 1.5% in the past year.

The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 6% in the past 60 days.

Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, with the average being 12.6%. Shares of BMI have lost 11% of their value in the past year.

The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.04 per share, increasing 9.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.

Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 29.2% in the past year.

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