* Q3 EPS C$0.74 vs C$0.83 a year earlier
* Lower tax expenses boosted year-earlier profit
* Operating revenue up 1.5 pct at C$4.98 bln
* Net postpaid subscriber additions up 17.1 pct
* Shares drop 1.4 pct in Toronto
(Adds investor comment, confirmed guidance, updates market
Nov 1 BCE Inc, Canada's biggest telecom
provider, said on Thursday its quarterly profit fell from a year
earlier, when lower tax expenses boosted results, and its shares
dropped despite strong wireless and media results.
In media, BCE said coverage of the London Olympics, led by
its CTV television network, helped boost revenue. It acquired
CTV, Canada's biggest private broadcaster, last year.
In wireless, BCE unit Bell Canada added almost twice as many
lucrative postpaid wireless subscribers in the third quarter as
competitor Rogers Communications Inc.
Postpaid subscriber numbers are watched closely because
those customers, who often sign multi-year contracts, typically
pay more each month than prepaid subscribers.
Like Rogers, Bell Canada signed up more new smartphone
customers. It raised the proportion of postpaid users with
smartphones to 60 percent from 43 percent a year earlier.
"The results were in line with expectations, but wireless
results were superb," said Desjardins Securities analyst Maher
In announcing its results, BCE offered no news on its
proposed acquisition of radio, cable-channel and
outdoor-advertising company Astral Media Inc. The C$3
billion deal has been blocked by Canada's broadcast regulator on
competition grounds, but BCE hopes to persuade the federal
government to overrule the regulator, and to that end recently
delayed the deal's closing.
Some of the subscriber gains were in Western Canada, where
Bell has opened more retail outlets. Yaghi said a focus on
expanding in that region seemed to be paying off.
"The economy is stronger (in Western Canada)," he said.
"There's more business customers, there's more international
calling south of the border, because of the type of industries
they work in."
Overall, Bell added 148,502 net postpaid subscribers, 17.1
percent more than in the same quarter last year. Rogers said
last week it added 76,000 net postpaid subscribers. BCE's other
major wireless competitor, Telus Corp, is set to report
earnings on Nov. 9.
"That market continues to grow for all the players," said
Ryan Bushell, portfolio manager at Leon Frazer & Associates.
"The smartphone adoption rates are pretty incredible."
Bushell favors BCE because of its dividend. At 5.2 percent,
its dividend yield is higher than Rogers' 3.6 percent or Telus's
3.8 percent, based on Wednesday's stock closes. BCE is one of
Leon Frazer's top holdings.
Bell's wireless customers paid an average of C$57.30 each
month, up from C$55.01 a year earlier.
BY THE NUMBERS
Overall, BCE's earnings before interest, taxes, depreciation
and amortization rose 4.0 percent.
Net income attributed to shareholders for the third quarter
to Sept. 30 fell to C$569 million ($569 million), or 74 Canadian
cents a share, from C$642 million, or 83 Canadian cents a share,
a year earlier.
Excluding severance and acquisition costs and other items,
adjusted earnings fell to C$588 million, or 76 Canadian cents a
share, compared with C$724 million, or 93 Canadian cents, a year
earlier. Analysts, on average, had expected earnings of 77
Canadian cents a share, according to Thomson Reuters I/B/E/S.
Operating revenue rose 1.5 percent to C$4.98 billion,
slightly above the average analyst estimate of C$4.94 billion.
In vetoing the proposed Astral acquisition, the Canadian
Radio-Television and Communications Commission (CRTC) said
Astral's media properties would give too much market power to
BCE has asked the federal government to intervene and direct
the CRTC to "adhere to its existing policies" and reconsider.
The CRTC ruling can also be appealed to the Federal Court of
The company affirmed its August forecast for full-year 2012
results. BCE expects adjusted earnings of between C$3.15 and
C$3.20 a share, and annual revenue growth at the low end of a 3
to 5 percent range.
The stock was down 1.4 percent at C$43.04 on Thursday
afternoon on the Toronto Stock Exchange.
(Reporting by Allison Martell; Editing by Gerald E. McCormick,
James Dalgleish, Leslie Gevirtz; and Peter Galloway)