Bell Canada parent BCE is raising its dividend 5 percent to shore up investor confidence, as well as implementing a series of cost-cutting measures.
BCE reported a fourth-quarter loss of $48 million - six cents per share - compared to Q407 profits of $2.4 billion and $2.93 per share, boosted by the sale of the company's Telesat satellite assets.
The company plans to increase its annual common share dividend to $1.54 a share to demonstrate a commitment to return cash to shareholders through "constant and sustainable" dividend increases.
Belt-tightening measures include cutting back on consultants ($20 million in 2009 vs $80 million in 2006), dropping down to 11 advertising firms (47 right now), and making cuts at outsourcing call centers. They've also pulled back 7,000 company credit cards.
The measure comes as the company makes its first earnings announcement after an attempt to buy up BCE in a $41 billion leveraged buy-out deal blew up, leaving BCE and the Ontario Teachers Pension Plan squabbling over a $1.2 billion fee if the deal didn't go through.
More cash will (presumably) make shareholders happy, but analysts are concerned that the company won't be making as much revenue from wireless as it used to.
- London Free Press reports. Article.
BCE sues for $1.2 billion break-up fee - FierceTelecom
In December, a massive BCE buyout deal blew up.