BCE Earnings Climb; Crave Subscriptions Soar, 2026 Guidance Steady
BCE Inc., the parent company of Bell Canada, reported its fourth-quarter earnings on Thursday, marking an important period for the telecommunications giant. The company achieved net earnings of $632 million, reflecting a 25% increase compared to the previous year.
BCE’s Revenue and Earnings Overview
In the fourth quarter, BCE reported revenue of $6.4 billion, a slight decline of 0.3% from the same period last year. This revenue fell short of analyst predictions, which estimated it at $6.5 billion. The decrease in revenue stemmed from challenges in both the media and Canadian telecom sectors.
Despite these challenges, BCE has set steady guidance for its 2026 financial outlook. The company anticipates revenue growth of 1-5%, alongside a free cash flow growth of 4-10%. Interestingly, BCE will maintain its annualized common dividend, which is part of its strategy to strengthen its balance sheet following a dividend cut last year.
Key Factors Influencing BCE’s Performance
- Crave subscriptions surged by 26%, boosted by the success of original shows like “Heated Rivalry.”
- BCE added 56,000 net new postpaid mobile subscribers in the quarter, surpassing analyst expectations.
- Internet revenues rose by 16.6%, aided by the acquisition of U.S.-based Ziply Fiber.
- Free cash flow decreased to $225 million, primarily due to higher capital expenditures.
CEO Mirko Bibic noted that the company is focusing on cost savings, reducing debt, and enhancing free cash flow. He expressed optimism about the ongoing initiatives to improve overall performance.
Challenges in Customer Retention
Even with new subscriptions and revenue growth in specific segments, BCE faced some setbacks. The company lost approximately 5,000 television subscribers and 43,000 home phone subscribers during this quarter. Additionally, net new retail internet subscriber additions declined by 61% compared to last year.
BCE’s churn rate improved slightly among postpaid wireless customers, but the average revenue per user (ARPU) showed a minor dip. This further highlights the competitive landscape as other brands in the market offered aggressive pricing strategies.
Strategic Adjustments and Future Directions
In light of these developments, BCE is cautious but hopeful about its operational and capital market strategies. Bibic emphasized the importance of avoiding price cuts for mobile plans while considering how to navigate a dynamic market environment.
Overall, BCE’s fourth-quarter earnings reflect a mixture of growth in new segments like streaming and internet services, coupled with challenges in traditional telecommunications. As the company moves forward, its steady guidance for 2026 indicates a commitment to long-term growth amidst a transformative industry landscape.
