Open this photo in gallery:
Bell Canada’s parent company BCE reported fourth-quarter net earnings of $632-million on Thursday.Paul Chiasson/The Canadian Press
Bell Canada parent company BCE Inc. BCE-T posted flat revenue and improved earnings in its fourth quarter which saw the major success of its Crave original show Heated Rivalry.
The company gave 2026 financial guidance consistent with the three-year outlook it provided last fall, projecting revenue growth of 1 to 5 per cent, free cash-flow growth of 4 to 10 per cent and no change to the annualized common dividend for its current financial year.
These ranges represent the opportunity for growth in its new business segments, including its artificial intelligence and U.S. fibre offerings, while also encompassing declines in its legacy businesses and an uncertain wireless mobile pricing environment.
In notes to investors Thursday morning, Desjardins analyst Jérome Dubreuil said the guidance was “modestly below expectations,” while Bank of Nova Scotia analyst Maher Yaghi called it “subdued but achievable.”
After cutting its dividend last year, the company set out to reset its balance sheet by paying down debt, realizing cost savings and growing free cash flow.
“Last year was the year to reset the strategy, both on the capital market side and the operational side,” said chief executive officer Mirko Bibic in an interview Thursday morning. “Momentum is starting to build against that broader plan.”
This includes holding off on dropping prices for its core brand’s cell phone plans, as other brands have offered steep discounts in recent weeks, Mr. Bibic said in a call with investors.
The Montreal-headquartered telecom and media company had revenue of $6.4-billion in its fourth quarter ended Dec. 31, down 0.3 per cent from last year and slightly missing analyst consensus of $6.5-billion. The result reflects declines in its media and Canadian telecom business, and the addition of its new U.S. fibre business.
Free cash flow in the quarter was down 75 per cent to $225-million, due to higher capital expenditures and decreased cash flows from operating activities during the quarter, in line with analyst expectations. However, on the full-year basis, cash flow was up 10 per cent.
Net earnings were up 25 per cent to $632-million. This year-over-year increase is in part because last year’s results included accounting losses tied to a lower share price, and because BCE had gains on investments this quarter related to the sale of its home security business.
Operating revenue for the company’s media division was down 3.4 per cent, due to lower year-over-year advertising revenue, even as Crave subscriptions rose 26 per cent in the quarter following the success of the streaming platform’s original hockey romance Heated Rivalry and French-language drama Empathie.
Bell added 56,000 net new postpaid mobile phone subscribers in the quarter, down slightly from last year but beating analyst expectations. The company lost nearly 3,400 net prepaid customers, a slight improvement from last year.
Churn – the rate of customer turnover on a monthly basis – improved among Bell’s postpaid wireless customers. Average revenue per user – or ARPU, an important industry metric that measures the value of each subscriber – for mobile customers dropped slightly during the quarter.
Internet revenues grew 16.6 per cent, supported by the contribution from Ziply Fiber, the U.S.-based internet company that Bell acquired last August. However, the company added just 13,000 net new retail internet subscribers, down 61 per cent from last year. This includes a decline in net new fibre customers, as BCE’s network buildout was reduced this year compared to the last.
“If you build fewer passings, you’re going to get a smaller bump from new penetration in new communities,” Mr. Bibic said.
The company lost about 5,000 television subscribers and 43,000 home phone subscribers in the quarter, similar to last year.
On Wednesday, before earnings, the company said it had laid off 60 employees in its Bell Media division, as part of a continuation to changes that led to the company cutting 650 roles last November.
Bell said that no newsgathering or reporting roles were impacted, saying a previous Unifor release stating that 11 journalists had been laid off was incorrect.
