Post by
Dibah420 on May 05, 2022 3:38pm
BMO: Beat driven by Media
Media has been a drag for so long, it's about time
May 5, 2022 | 08:44 ET~ BCE BCE-TSX BCE-NYSE Rating Outperform Price: May-4 $69.41 Target $75.00 Total Rtn 13%
Q1 Beat Driven by Media Bottom Line: Q1 EBITDA and EPS were ahead-of-expectations driven by a strong Media result.
EBITDA increased 6% and EPS was $0.89 vs. $0.82 Street.
Wireless results were in line with stronger recovery in ARPU of+5% (roaming lift) and better postpaid churn.
Wireline results were broadly in line with slightly better internet adds (+26k) and some softness in enterprise revenues that reflect delayed spending.
Media strength reflected strong advertising (+9%) and subscriber growth (+22%). F22 guidance was reaffirmed.
Key Points • Consolidated revenues increased 2.5% to $5,850 million (consensus $5,827 million), and adjusted EBITDA was higher by 6% to $2,584 million (consensus $2,503 million).
Adjusted EPS were $0.89 versus $0.82 consensus and $0.78 last year.
Reported FCF was $723 million vs. $940 million last year.
BCE acquired EBOX for net $139 million and divested Createch for $53 million in the quarter.
Media represented ~80% of the EBITDA beat to expectations.
• Wireless results in line with encouraging operating metrics. Network revenue was up 9% to $1,646 million (consensus $1,620 million) EBITDA increased 9% to $1,009 million (consensus $996 million). Margins expanded 170bps to 46%. Wireless operating metrics beat with +34k postpaid phone and -2k prepaid phone net adds (vs. consensus of +34k postpaid and -7k prepaid), blended ARPU was up 5% to $57.98 (consensus $56.82), and postpaid churn improved 10bps to 0.79% (consensus 0.93%; blended churn improved 11bps to 1.12%). For perspective, Rogers reported mobile phone net adds of +50k and a blended ARPU increase of ~3%. TELUS is expected to reported mobile phone net adds of +27k and blended ARPU increase of ~1%.
• Wireline financial results in line. Revenue was down 2% to $3,013 million (consensus $3,051 million) with adjusted EBITDA flat at $1,367 million (consensus $1,363 million) reflecting some softness in enterprise. Wireline subscriber net adds results were in line on Video (-8k), IPTV (+12k), and Residential Voice (-42k) with slightly better results in Internet (+26k).
• Media results beat. Revenue was up 16% to $825 million (consensus $765 million) and EBITDA was higher by 46% to $208 million (consensus $144 million), driven by television advertising (+7%), subscriber revenue growth, and some recovery in OOH and radio advertising.