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Articles BCE Profit RISES Published: November 12, 2007  Print BCE Profit RISES Wojtek Dabrowski and Leah Schnurr, Reuters Published: Wednesday, November 07, 2007 TORONTO (Reuters) - BCE Inc reported a higher third-quarter profit on Wednesday as revenue rose and wireless activations surged at Canada's biggest telecom company, which is preparing to go private. BCE, which is being bought out in a C$34.8-billion ($37.8-billion) deal, said it earned C$440 million, or 50 Canadian cents a share, in the quarter. That was up from C$302 million or 36 Canadian cents a share, in the same period the year before. Operating income was C$897 million, up from C$799 million in the same period last year. BCE's operating revenue was C$4.5 billion, up from C$4.4 billion, while operating revenue at its core Bell Canada unit was C$3.7 billion, compared with C$3.6 billion the previous year. Earnings before special items were 54 Canadian cents a share in the quarter, the company said. According to Reuters Estimates, analysts expected BCE to earn 52 Canadian cents a share before one-time items on revenue of C$4.46 billion. BCE said its Bell Wireless business had its best third quarter ever with 445,000 gross activations, up 15.6 percent from last year. The rise was stimulated by an expanded market presence and efforts to "re-energize" the wireless business, George Cope, Bell Canada's chief operating officer, said in a statement. Net activations were 137,000, or 7% higher than the third quarter of 2006, the company said, adding its wireless client base now stands at just over 6 million. "It was a nice improvement on their wireless side," said MacDougall, MacDougall & Mac Tier analyst Troy Crandall. BCE is locked in a three-way battle for Canada's wireless market with TELUS Corp and Rogers Communications Inc. However, "Bell is still paying a lot more for its subscribers versus their value than Rogers or TELUS," Crandall said. The competition between BCE and its rivals could get fiercer if the federal government decides to set aside wireless spectrum space for a new entrant in an auction slated for next year. The rules for the auction are expected this fall. In its wire line business, Montreal-based BCE continued to lose clients. Residential local access line levels dropped by 104,000, higher than last year's 90,000 decline. It said it disconnected non-paying customers, but also suffered as a "major cable competitor" Videotron expanded its presence. BUYOUT STILL ON TRACK "Bell continued to make progress on two fronts this quarter, moving towards the completion of the privatization transaction and delivering steadily improving results," The $6M Dollar Man Michael Sabia, chief executive of Bell Canada, said in a statement. He said the company's privatization is still on schedule to close in the first quarter of 2008. BCE is being bought out by a consortium led by the Ontario Teachers' Pension Plan for C$42.75 per share in cash. The investor group also includes U.S. private equity firms Providence Equity Partners and Madison Dearborn Partners. BCE shares have traded below the offer price as investors' fear the deal could be delayed or re-priced because of recent debt-market turbulence. However, the buyers have said they remain committed to the terms of the transaction. Importantly, BCE revealed no developments on Wednesday that could suggest the deal could be delayed or derailed. "The absence of any alarming negative trends will leave the market comfortable that the sponsors have no reason walk from this deal," National Bank Financial analyst Greg MacDonald wrote in a note to clients, adding that BCE's results were very close to his estimates. BCE's shares eased 5 Canadian cents to C$40.74 on the Toronto Stock Exchange on Wednesday morning. ($1=$0.91 Canadian) (c) Reuters 2007 653 Views Most Read Articles
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