, BNN Bloomberg
Paul Gardner Talks BCE
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BCE Inc. warns that a number of factors, including the impact of rising interest rates on debt service costs, could reduce adjusted earnings per share by up to 7% in 2023.
The company said higher interest costs, higher depreciation expense from investments in next-generation 5G networks, and a lack of tax adjustments limit its ability to offset these headwinds, so adjusted We expect EPS to decline between 3% and 7%.
The forecast comes alongside the company’s fourth quarter results, where the operator substantially met analyst expectations. Adjusted earnings per share were $0.71 versus an estimated $0.72. Meanwhile, revenue rose nearly 4% from the same period last year to his $6.44 billion. The average analyst view was that he was $6.39 billion.
Net income was $567 million, down from $658 million in the fourth quarter of 2021. This was due to higher asset impairment charges and higher interest expense.
Overall, the wireless business ended the year strong as it rolled out its 5G network. Wireless revenue was up 7.7% year-over-year, and activations of postpaid net subscribers – these important and high-value mobile phone customers – were up 41.2% in the quarter to 154,617. .
In a note to clients, Scotiabank analyst Maher Yaghi said the company was boosted not only by increased subscriber numbers, but also by customers signing up for higher-end plans.
“Services revenue was $1.7 billion, up 5.8% year-over-year versus our estimate of $1.8 billion. But it’s also the result of BCE’s continued push to offer its customers high-end plans.”
However, churn, a key industry indicator of customer churn, rose 14 basis points in the quarter to 1.22%. The company believes this was due to increased promotional activity in the second half of the year.
In a release, BCE Inc. Chief Financial Officer Glen LeBlanc said the company’s 2022 performance will contribute in no small way to its ability to clear some clear macroeconomic hurdles.
“Despite unprecedented cost pressures from inflation and record storms, an expensive and highly competitive Black Friday and soft media advertising, we delivered positive adjusted EBITDA growth.
The company also announced a 5.2% increase to its quarterly dividend, bringing the dividend to $0.9675 per common share.
BCE is the parent company of BNN Bloomberg through its Bell Media division.
