BCE's profit falls ahead of sale
Communications giant BCE Inc. saw its second-quarter profit fall by almost 50 per cent as the company gets ready to go private.
BCE, which owns Bell Canada, made $361 million, or 43 cents a share, in the April to June period this year — down from $667 million, or 83 cents a share, in last year's second quarter.
Included in this year's figures, however, were charges related to discontinued operations and other unusual items totalling six cents a share.
In addition, last year BCE gained from a favourable tax ruling, worth a hefty 36 cents a share, and from the sale of the directory business at its Aliant subsidiary.
Subtracting out all these special items, BCE earned 53 cents a share in this year's second quarter, down five per cent versus 56 cents per share for the same period in 2007.
In addition, BCE is preparing for its sale to an investment consortium led by the Ontario Teachers' Pension Plan. The transaction, worth almost $52 billion, is expected to close by Dec. 11, the company said.
As part of the prettying process, BCE announced that it was reducing its staff by 2,500, approximately six per cent of the company's total workforce.
BCE president and CEO George Cope said he was happy with the company's results.
BCE CEO George Cope is disappointed by his company's performance in its internet division.(Kevin Frayer/Canadian Press)"This was a quarter of strong progress against our strategic imperatives, especially the significant acceleration of our wireless business," he said in a statement.
The Montreal-based telecommunications company said it added 83,000 net new wireless subscribers in the quarter, a gain of more than 30 per cent compared with the same time last year.
Counting new postpaid wireless customers — a slightly different measure of the mobile phone business — the company said it had its best quarter in almost three years.
That performance was especially important given that the mobility sector constitutes one-third of BCE's $3.7 billion in revenue in the quarter.
In addition, BCE's wireless section posted higher revenue to the tune of 10.7 per cent in the second quarter, compared with an increase of 1.7 per cent in the company's overall sales.
Wire-line woesTroubles remain in BCE's wire-line business, where the company lost 125,000 customers in the residential segment and 7,000 in its business area.
Wire-line revenue sagged by 1.6 per cent to $2.6 billion in the period. Here, gains in the video and data side of the business were offset by losses in equipment sales and long-distance usage.
BCE has been losing land-line customers for some time as more subscribers turn to the internet and wireless devices for their communication needs.
Where Cope was bothered by BCE's second-quarter results was on the internet side of the business.
"We were disappointed with our high-speed internet business this quarter, but we are taking action to improve performance in the second half of the year," he said.
BCE lost 1,000 high-speed internet customers in the second quarter, due mainly to weak sales in its retail channels. The company has slightly more than two million high-speed subscribers.
Shares in BCE ended the trading day up 50 cents, closing at $39.66.
0 comments:
Post a Comment