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BCE Reports Excellent Q3 as Pandemic Recovery Is Well Underway, but Further Opportunities Remain

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

Although BCE’s third-quarter revenue and EBITDA fell slightly short of FactSet consensus estimates, it had a fantastic quarter in our view, with results driven by the most important metrics. The primary pressure on sales was lower equipment revenue, which generates little profit and in some cases was the result of a COVID-19-induced spike last year. Wireless, wireline, and media all produced excellent results, recouping nearly all of their pandemic losses, even as the recovery is not yet complete.

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Company Profile

Business Description

BCE is both a wireless and Internet service provider, offering wireless, broadband, television, and landline phone services in Canada. It is one of the big three national wireless carriers, with its roughly 10 million customers constituting about 30% of the market. It is also the ILEC (incumbent local exchange carrier--the legacy telephone provider) throughout much of the eastern half of Canada, including in the most populous Canadian provinces--Ontario and Quebec. Additionally, BCE has a media segment, which holds television, radio, and digital media assets. BCE licenses the Canadian rights to movie channels including HBO, Showtime, and Starz. In 2020, the wireline segment accounted for 55% of total EBITDA, while wireless composed 38%, and media provided the remainder.

Contact
1 Carrefour Alexander-Graham-Bell, Building A, 7th Floor
Verdun, QC, H3E 3B3, Canada
T +1 800 339-6353
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 50,704

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