BCE (BCE) Q3 2024 earnings summary

Executive summary

• Regulatory changes halted the TPIA resale business, preventing new subscriber additions but allowing existing customers to remain or migrate to fiber where available.

• Adjusted EBITDA grew 2.1% year-over-year to a record margin of 45.6%, driven by disciplined execution and focus on fiber and premium wireless brands.

• Net earnings declined by $1.9B year-over-year due to $2.1B in non-cash media asset impairment charges, resulting in a net loss of $1,191M.

• Free cash flow increased 10.3% year-over-year, while cash flows from operating activities fell 6.1%.

• Strategic focus remains on cost savings, digital transformation, and growth in fiber, premium wireless, and media segments.

Financial highlights

• Revenue was $5,971M, down 1.8% year-over-year, with service revenue flat and product revenue down 14.3%.

• Adjusted EBITDA reached $2,722M, up 2.1% year-over-year, with a margin of 45.6%.

• Adjusted EPS was $0.75, down 7.4% year-over-year; net loss per share was $1.36.

• Capital expenditures decreased 17.7% to $954M, reducing capital intensity to 16.0%.

• Free cash flow rose to $832M, up 10.3% year-over-year.

Outlook and guidance

• 2024 revenue growth guidance revised to approximately -1.5% due to lower wireless product revenues and device sales.

• All other 2024 financial guidance targets, including adjusted EBITDA, capital intensity, adjusted EPS, and free cash flow, remain unchanged.

• Dividend guidance maintained at $3.99 per share annualized, with dividend growth paused until payout and leverage ratios improve.

• Fiber and 5G wireless are identified as key growth drivers, with continued investment planned.

• Holiday promotional periods are a key variable for service revenue and ARPU trends.