BCE Inc., the Canadian communications company, experienced a decline in net earnings during the second quarter, even though it saw an increase in revenue from residential internet and wireless services. The company’s profit fell by almost 40%, with net earnings amounting to 397 million Canadian dollars ($297.4 million), or C$0.37 per share, compared to 654 million Canadian dollars, or C$0.66 per share, in the previous year.
Several factors contributed to this decline in profit. BCE incurred a loss of C$377 million on its share of an obligation to repurchase a minority interest in one of its joint venture equity investments at fair value. Additionally, higher interest expenses, increased severance costs, acquisition expenses, and other costs related to workforce cuts impacted the company’s financial performance.
On an adjusted basis, the per-share earnings stood at C$0.79, just below the mean estimate of C$0.80 as reported by 14 analysts polled by FactSet.
Despite the decline in profit, BCE witnessed growth in operating revenue for the quarter. The revenue rose by 3.5% and amounted to C$6.07 billion, slightly surpassing market expectations of C$6.05 billion.
One of the key drivers of revenue growth was the increase in wireless service revenue, which grew by 4.4%. BCE observed the highest number of second-quarter postpaid net activations in 18 years. Moreover, the company experienced significant growth in retail internet net activations, with a remarkable 10% increase since 2007. Additionally, fiber activations saw a substantial surge of 38%, contributing to a 7% growth in residential internet revenue.
BCE has reaffirmed its financial targets for the year, aiming for revenue growth between 1% and 5%, while expecting a decline in adjusted earnings per share of 3% to 7%.