Big two beat analyst expectations

6 May 2004

Canada’s two biggest telcos, BCE and Telus, have both reported stronger than expected first quarter profits thanks to cost cutting and wireless growth. Net income at BCE grew CAD15 million to CAD488 million (USD356 million) in the three months to the end of March, whilst Telus reported a CAD11.8 million increase to post net earnings of CAD101.3 million. Both companies are increasingly relying on their wireless units to generate growth as demand for wireline telephony falls; Telus’ mobile revenues accounted for 35% of its total turnover in the period, whilst BCE’s cellular operations generated 16%. Telus signed up 76,100 new subscribers in the quarter and pushed ARPU up from CAD54 to CAD57. BCE added 92,000 wireless customers in the quarter, to take its total base to 4.5 million, whilst local lines in service fell by 126,000 year-on-year. Telus lifted its 2004 full-year earnings guidance by CAD0.05 a share to CAD1.10-CAD1.30; BCE confirmed that it expected ‘mid-to-high single digit’ earnings per share growth.