BCE's Q4 Earnings Beat Estimates, Revenues Increase Y/Y
BCE Inc. BCE reported fourth-quarter 2023 adjusted earnings per share (EPS) of C$0.76 (56 cents) compared with C$0.71 in the prior-year quarter. The Zacks Consensus Estimate was pegged at 54 cents.
Quarterly total operating revenues increased 0.5% year over year to C$6,473 million ($4,755 million). The consensus estimate was pegged at $4,819.1 million. This was driven by a 3.6% rise in Product revenues, which totaled C$1,125 million, whereas Service revenues declined 0.1% to C$5,348 million.
The uptick was due to solid residential Internet growth and higher Bell Communication and Technology Services (Bell CTS) sales.
BCE, Inc. Price, Consensus and EPS Surprise
BCE, Inc. price-consensus-eps-surprise-chart | BCE, Inc. Quote
Segmental Results
The company announced that it combined its Bell Wireless and Bell Wireline operating segments to form a segment called Bell CTS. Going forward, the company will report its segment results under Bell CTS and Bell Media.
Bell CTS’ operating revenues increased 1.7% year over year to C$5,744 million, driven by strong service and product revenue growth.
Service revenues jumped 1.2% to C$4,619 million, driven by the ongoing expansion of mobile phones, mobile connected devices and retail Internet subscribers, higher mobile phone blended ARPU and increased sales of business service solutions to large enterprise customers. This was partly offset by the continued decline in legacy voice, data and satellite TV services and retention and bundle discounts on residential home services.
Product revenues were up 3.6% to C$1,125 million due to a greater sales mix of higher-value mobile phones and lower year-over-year device discounts during the Black Friday and December holiday periods.
Postpaid mobile phone net subscriber activations were 128,715, down 16.8% year over year. The number of postpaid mobile phone net subscriber activations decreased owing to higher customer churn due to promotional offers on postpaid plans. This was partly offset by higher gross subscriber activations, continued 5G and multi-product bundling momentum, effective promotions and stronger Virgin Plus performance.
Prepaid mobile phone and net subscriber activations decreased owing to higher customer churn due to promotional offers on postpaid plans.
Bell Media generated revenues of C$822 million, declining 7.5% year over year. The revenues decreased due to lower advertising revenues.
Other Details
Adjusted EBITDA in the reported quarter was C$2,567 million, up 5.3% year over year. The uptick was due to an increase of 4.8% in the CTS segment and 14.7% in the media segment. The adjusted EBITDA margin was 39.7% compared with 37.8% in the prior-year quarter.
Cash Flow
BCE generated C$2,373 million of cash from operating activities compared with C$2,056 million in the prior-year quarter. The free cash flow was C$1,289 million compared with C$376 million a year ago due to lower capital expenditures.
2024 Outlook
BCE issued the financial guidance for 2024. It expects revenues to stay flat to grow 4% and adjusted EBITDA growth between 1.5% and 4.5%.
Free cash flow growth is projected to be in the range of (3)-(11)%. The annualized common dividend per share is estimated to be C$3.99.
Zacks Rank & Stocks to Consider
BCE currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader technology space are Itron ITRI, Woodward WWD and Watts Water Technologies WTS. Woodward and Itron sport a Zacks Rank #1 (Strong Buy), while Watts Water Technologies 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 Itron’s 2023 EPS has remained unchanged in the past 60 days to $2.88. ITRI’s long-term earnings growth rate is 23%.
Itron’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 289.3%. Shares of ITRI have gained 33.1% in the past year.
The Zacks Consensus Estimate for Woodward’s 2024 EPS has inched up 5.7% in the past 60 days to $5.20. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have gained 31% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 0.1% in the past 60 days to $8.09. WTS’s long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have soared 23.2% in the past year.
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