BCE Q1 Earnings & Revenues Surpass Estimates, Rise Y/Y

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BCE Inc. BCE reported first-quarter 2022 adjusted earnings per share of C$0.89 (70 cents) compared with C$0.78 in the prior-year quarter. The Zacks Consensus Estimate for the same was pegged at 64 cents.

Quarterly total operating revenues moved up 2.5% year over year to C$5,850 million ($4,619 million). The consensus estimate was pegged at $4,589 million. This was driven by a 4.2% rise in service revenues, which totaled C$5,177 million, reflecting solid wireless, residential Internet and media growth. Product revenues declined 8.8% to C$673 million, owing to the ongoing supply-chain challenges.

Significant broadband investments, 5G network acceleration program on the back of an accretive subscriber base and a robust financial position bolstered the company’s operating momentum.

BCE, Inc. Price, Consensus and EPS Surprise

BCE Q1 Earnings & Revenues Surpass Estimates, Rise Y/Y — BCE, Inc. Price, Consensus and EPS Surprise

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

Segmental Results

Bell Wireless’ operating revenues increased 5.2% year over year to C$2,210 million, driven by strong service revenue growth. This was partly offset by lower year-over-year product revenues.

Service revenues jumped 8.7% to C$1,646 million, driven by growth in mobile phone and connected device subscriber bases, and higher blended mobile phone average revenue per user. Product revenues were down 3.8% to C$564 million.

This reflects a reduction in sales transaction volumes attributable to longer handset lifecycles and a high mix of pre-owned device customer activations. The segment also witnessed mobile device and consumer electronics inventory constraints resulting from the pandemic-induced supply-chain challenges. Bell Wireless added 32,176 post-paid and prepaid mobile phone subscribers compared with 2,405 in the first quarter of 2021.

Bell Wireline revenues decreased 2.2% to C$3,013. Wireline service revenues fell 0.8% to C$2,903 million. This resulted from continued declines in legacy voice, data and satellite TV services, and lower sales of IP connectivity and business service solutions partly due to large enterprise customers deferring project spending due to the COVID-related disruptions and the sale of Createch on Mar 1, 2022.

Higher year-over-year residential Internet income partially countered these effects. Product revenues fell 28.6% to C$110 million mainly due to lower sales of data equipment to enterprise business customers resulting from delayed spending from the pandemic-induced supply-chain disruptions.

Bell Media generated revenues of C$825 million, up 15.7% year over year. The rise was driven by higher subscriber revenues and increased TV advertiser spending.

Other Details

Adjusted EBITDA in the reported quarter was C$2,584 million, up 6.4% year over year. The rise was driven by an increase of 9.3% in wireless, 0.3% in wireline segments, and 45.5% in media. The adjusted EBITDA margin was at 44.2% compared with 42.6% in the prior-year quarter.

Cash Flow

BCE generated C$1,716 million of cash from operating activities compared with C$1992 million in the prior-year quarter. Free cash flow was C$723 million compared with C$940 million a year ago due to lower cash flows from operating activities, partly offset by lower capital expenditure.

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%. Annualized common dividend per share is estimated to be C$3.68.

Zacks Rank & Other Stocks to Consider

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

Some other top-ranked stocks in the broader industry are RWE AG RWEOY, OGE Energy OGE and National Fuel Gas Company NFG. RWE, OGE and National fuel currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RWE’s 2022 earnings is pegged at $2.72 per share, rising 12% in the past 60 days. The long-term earnings growth rate is anticipated to be 4.5%.

Shares of RWE have grown 11.9% in the past year.

The Zacks Consensus Estimate for OGE’s 2022 earnings is pegged at $2.15 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 3.5%.

Shares of OGE have gained 15.7% in the past year.

The Zacks Consensus Estimate for National’s fiscal 2022 earnings is pegged at $6.07 per share, rising 12.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 10.3%.

National’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average being 9.89%. Shares of National have grown 39.2% in the past year.

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