BCE reports profit boost after wave of job cuts
By Christopher Reynolds, The Canadian Press on August 1, 2024.
BCE Inc. boosted its profits despite a dip in revenue last quarter as the telecoms giant began to feel the financial effect of thousands of job cuts from earlier this year. Earnings attributable to shareholders jumped 63 per cent year-over-year to $537 million in the company’s second quarter. The higher profits resulted from lower expenses, including lower buying obligations, severance and acquisition costs, Bell said. Revenues in the quarter ended June 30 slipped one per cent to $6.01 billion from the same period a year earlier. Chief executive Mirko Bibic attributed the decrease to low prices at rival mobile and internet providers as well as the closure of 107 The Source stores – 39 per cent of the electronics retailer’s locations. “We executed with financial discipline against the backdrop of a highly competitive marketplace,” Bibic told analysts on a conference call Thursday. “While consolidated top-line growth continued to be impacted by sustained competitive pricing pressures and expected revenue loss from The Source, we remain laser-focused on profitable margin-accretive subscriber growth and driving costs out of the organization.” The Montreal-based media conglomerate achieved a 1.3 percentage-point increase in its adjusted earnings margin year-over-year. In February, BCE announced that 4,800 jobs “at all levels of the company” would be cut in a staff reduction of about nine per cent. The move came as part of a restructuring that axed multiple television newscasts, including at CTV and BNN Bloomberg, and sold 45 Bell Media-owned regional radio stations across the country. Analyst Jerome Dubreuil of Desjardins called BCE’s financial results “slightly positive,” as better margins offset lower revenues. “BCE’s restructuring plan is becoming more apparent,” he said in a note to investors. “We believe telecom value creation will have to come from tight cost control in the future given the challenged top line, and we are encouraged by BCE’s progress in this regard.” Earnings worked out to 59 cents a share for the second quarter, up from 37 cents a share the year before. Adjusted earnings slipped to 78 cents per share from 79 cents per share last year, in line with analysts’ expectations, according to financial markets firm LSEG Data & Analytics. This report by The Canadian Press was first published Aug. 1, 2024. Companies in this story: (TSX:BCE) 16-15
