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BCE Q3 Earnings & Revenues Surpass Estimates, Rise Y/Y

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BCE Inc. (BCE - Free Report) reported third-quarter 2022 adjusted earnings per share of C$0.88 (67 cents) compared with C$0.82 in the prior-year quarter. The Zacks Consensus Estimate for the same was pegged at 64 cents.

Quarterly total operating revenues moved up 3.2% year over year to C$6,024 million ($4,618 million). The consensus estimate was pegged at $4,499 million. This was driven by a 1.8% rise in service revenues, which totaled C$5,193 million, and Product revenues improved 12.8% to C$831 million.

The uptick was due to solid wireless and residential Internet growth along with higher business wireline data equipment sales.

BCE, Inc. Price, Consensus and EPS Surprise

BCE, Inc. Price, Consensus and EPS Surprise

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

Segmental Results

Bell Wireless’ operating revenues increased 7.4% year over year to C$2,466 million, driven by strong service and product revenue growth.

Service revenues jumped 7% to C$1,769 million, driven by growth in mobile phone and connected device subscriber bases; and higher blended mobile phone average revenue per user due to easing covid restrictions and rising international roaming revenue.

Product revenues were up 8.6% to C$697 million, driven by a greater sales mix of premium mobile phones.

Bell Wireless added 224,343 post-paid and prepaid mobile phone subscribers compared with 136,464 in the third quarter of 2021.  The number of post-paid mobile phone net subscriber activations rose as a result of higher in-store foot traffic than the previous year, sustained momentum of 5G, immigration growth, stronger business client demand, and a greater emphasis on bundling wireless service with the Internet.

Prepaid mobile phone net subscriber activations increased owing to higher gross activations and increased immigration and travel to Canada.

Bell Wireline revenues increased 1% to C$3,046. Wireline service revenues decreased 0.4% to C$2,907 million, owing to the continued decline in legacy voice, data and satellite TV services along with higher customer acquisition and retention discounts. Also, sales of IP connectivity and business service solutions declined due to large enterprise customers deferring project spending due to supply-related disruptions and the sale of Createch on Mar 1, 2022.

Product revenues increased 46.3% to C$139 million due to higher sales of data equipment to enterprise business customers resulting from timings of deals and easier comparison, owing to data equipment shortages in the prior-year quarter.

Bell Media generated revenues of C$719 million, unchanged year over year. The revenues were unchanged due to higher subscriber revenues partly offset by lower advertiser revenue.

Other Details

Adjusted EBITDA in the reported quarter was C$2,588 million, up 1.2% year over year. The rise was driven by an increase of 7.8% in the wireless segment, partly offset by a decrease of 1.2% in wireline segments and 15.3% in media. The adjusted EBITDA margin was 43% compared with 43.8% in the prior-year quarter.

Cash Flow

BCE generated C$1,996 million of cash from operating activities compared with C$1,774 million in the prior-year quarter. The free cash flow was C$642 million compared with C$566 million a year ago due to higher cash flows from operating activities.

2022 Outlook

BCE issued the financial guidance for 2022. It expects revenue growth between 1% and 5% and adjusted EBITDA between 2% and 5%. Adjusted earnings per share are estimated to grow 2-7%. Free cash flow growth is projected to be 2-10%. The annualized common dividend per share is estimated to be C$3.68.

The company has declared a quarterly dividend of C$0.92 cents per share, payable on Jan 16, 2023, to shareholders of record on Dec 15, 2022.

Zacks Rank & Stocks to Consider

BCE currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader technology space are InterDigital (IDCC - Free Report) , Pure Storage (PSTG - Free Report) and Jabil (JBL - Free Report) . InterDigital and Jabil currently sport a Zacks Rank #1 (Strong Buy), whereas Pure Storage currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks.

The Zacks Consensus Estimate for InterDigital’s 2022 earnings is pegged at $2.45 per share, up 2.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.

InterDigital’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 81.9%. Shares of IDCC have decreased 35.6% in the past year.

The Zacks Consensus Estimate for PSTG 2022 earnings is pegged at $1.18 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.

Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have increased 12.1% in the past year.

The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8 in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.

Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have decreased 1.4% in the past year.

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