Bell Canada's (NYSE: BCE) bet on delivering TV service to its residential customers paid off in Q3 as net profit jumped to CAD 642 million (USD 631.7 million), up from CAD 454 million (USD 446.7 million) in Q3 2010.
Click here for details from Bell Canada's Q3 2011 earnings results.
Adjusted earnings were CAD 93 cents (USD 92 cents) a share, while revenue was up nearly 9 percent to CAD 4.91 billion (USD 4.83 billion).
These results surpassed financial analysts polled by Thomson Reuters I/B/E/S, who forecast the Canadian telco would report earnings of CAD 73 cents (USD 72 cents) a share.
During the quarter, Bell cut 1,200 management positions as part of a company-wide effort to reduce the costs of running its traditional wireline voice business.
Despite ongoing erosion of its landline voice service base, the service provider's residential services division saw what it said was "solid growth in TV and residential Internet revenues" in addition to seeing a reduction in long distance voice service erosion.
Here's a breakdown of the company's key wireline metrics:
- Landline voice: Driven by more customers replacing their PSTN home phone lines for either wireless or IP-based voice services, total Network Access Service (NAS) declined by 110,629 in Q3, up from the 92,169 it reported in Q3 2010. Consumer business NAS declined only 15,362 this quarter versus 23,686 last year due to growth in wholesale net additions and customer retention activities. Residential NAS line losses increased 39.1 percent to 95,267. Overall NAS declined by 5.1 percent to 6,205,336 at the end of the quarter. Out of the traditional voice portfolio, long distance revenues only declined 0.4 percent to $223 million, a factor Bell attributes to an increase in global long distance minute sales.
- Broadband services: In Q3, the telco lost 101 broadband subscribers versus an increase of 21,668 in Q3 2010. However, Bell had over 2.1 million high-speed Internet subscribers or 1.3 percent more than it had in the same quarter last year. To more effectively battle the threat from aggressive cable operators like Videotron, Bell invested over CAD 652 million (USD 642 million) to build out its Fiber to the Premises (FTTP) network to homes and businesses in Ontario and Québec.
- Video services: Video continues to pay off for Bell as the sector's revenues rose 3.9 percent to CAD 454 million (USD 447 million) this quarter. Driven by subscriber growth and higher ARPU, total new TV subscribers rose 40.5 percent to 26,037 in Q3, a factor related to its new Bell Fibe TV service as Bell's broadband fiber IPTV service footprint grew to 1.5 million households by the end of Q3. As of the end of the quarter, there were 2,059,870 Bell TV subscribers or 3.1 percent more than last year.
For the year 2011, Bell increased its full-year 2011 adjusted earnings per share forecast to between CAD 3.10 (USD 3.05) and CAD 3.15 (USD 3.09) a share.
- see the release
- Reuters has this article
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