BCE 2Q Net Excl Items Falls; Wireless Operations Strong

Montreal's BCE posted second-quarter earnings before items that were slightly below year-earlier levels, though results from its wireless business were strong.

BCE, Canada's largest communications company, earned C$361 million or 45 Canadian cents a share in its latest quarter, down from C$667 million or 83 Canadian cents a year earlier.

Excluding items, BCE earned C$425 million or 53 Canadian cents a share, down from C$445 million or 56 Canadian cents a year earlier.

Operating revenue improved to C$3.70 billion from C$3.64 billion.

The Thomson Reuters mean estimate was for a profit of 56 Canadian cents a share on revenue of C$4.24 billion.

BCE, which is in the process of being taken private, said "this was a quarter of strong progress against our strategic imperatives, especially the significant acceleration of our wireless business."

It said its wireless division had the highest level of postpaid net activations since the fourth quarter of 2005.

BCE's Bell Wireless segment achieved 111,000 postpaid net activations, up from 43,000 a year earlier, while total net activations rose 31.7% to 83,000. Postpaid churn improved to 1.1% and blended churn improved to 1.6% from 1.4% and 1.8%, respectively.

Bell operating revenue rose 1.7% to C$3.7 billion and Bell EBITDA was up 0.4% to C$1.41 billion.

BCE said it was "disappointed" with its high-speed Internet business during the quarter, but is "taking action to improve performance in the second half of the year." It noted that high-speed Internet customer connections decreased by 1,000 this quarter due to weaker sales in its retail channels and lower overall market demand due to the relatively high broadband Internet penetration.

As reported, BCE is being taken private by an investor group led by Ontario Teachers' Pension Plan. Closing is expected by Dec. 11.

Last week, the company announced it was cutting about 2,500 management positions at its Bell Canada unit, representing about 6% of the total Bell workforce and 15% of management.

The estimated cost of the reductions is about C$230 million. Combined with other reductions this year, the streamlining is expected to provide annual savings of about C$300 million.

In Toronto Tuesday, shares of BCE closed at C$39.16, up 0.5%.

-Judy McKinnon; 416-306-2100; AskNewswires@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 6th August 2008