BCE reports Q3 profit down from year ago, wireless and home internet boost revenue

MONTREAL — BCE Inc. reported its third-quarter profit edged lower compared with a year ago as its revenue rose, helped by growth in its wireless and home internet operations.

The company's wireless business saw its operating revenue gain 7.4 per cent compared with a year ago, while wireline operating revenue rose 1.0 per cent. Bell's media operating revenue was unchanged as higher subscriber revenue was offset by lower year-over-year advertising revenue due to the weaker macroeconomic environment.

"We experienced over 400,000 net activations across our wireline and wireless networks, with our highest-ever number of total mobile phone net additions, and we also gained a significant share of internet subscriber growth with over 95,000 new net fibre-to-the-home customers this past quarter, up 33 per cent over last year and our best-ever result," said BCE CEO Mirko Bibic in a statement attached to the company's earnings release.

Bibic said the results for the quarter "firmly" places BCE "in a solid competitive position" going into the end of the year.

"Both wireless and wireline loading were strong thanks to immigration, the first true 'back to school' since the onset of the pandemic and (Rogers Communications Inc.) outage in July. It is encouraging to see robust subscriber loading in a year of peak capex, suggesting the fibre strategy has been successful so far," Desjardins analyst Jerome Dubreuil said in a note to clients.

BCE said operating costs increased in the third quarter from the impact of storm-related costs mainly due to Hurricane Fiona which hit Canada in September.

On its earnings call with analysts, the company said it expects additional costs to flow into the fourth quarter as the company continues its cleanup in Atlantic Canada.

Bibic said the hurricane's damage to its infrastructure was "unprecedented."

"It reinforced that our accelerated capital investment program to build and expand reliable fibre and wireless networks across our footprint continues to be the right approach for our customers," he said.

Operating costs also increased in the quarter because of continued inflationary pressures on fuel, utility and labour costs, the company said.

On the earnings call, the company said the labour costs were related to "higher than typical wage increases."

BCE said its on track to deliver on its 2022 financial targets, which is encouraging given the uncertain economic outlook, said Desjardins' Dubreuil.

BCE reported net income attributable to common shareholders of $715 million or 78 cents per share for the quarter ended Sept. 30, down from a profit of $757 million or 83 cents per share in the third quarter of 2021.

Operating revenue totalled $6.02 billion, up from nearly $5.84 billion in the same quarter last year.

On an adjusted basis, BCE said it earned 88 cents per share in its latest quarter, up from an adjusted profit of 82 cents per share in the same quarter last year.

Analysts on average had expected a profit of 84 cents per share and $6.02 billion in revenue, according to estimates compiled by financial markets data firm Refinitiv.

This report by The Canadian Press was first published Nov. 3, 2022.

Companies in this story: (TSX:BCE)

The Canadian Press