MONTREAL — BCE Inc. executives said Thursday that they are beginning to see early signs that customers are getting ready to emerge from COVID-19 restrictions and Bell Canada is in good position to respond.
However, they can’t predict yet what measures the company will take to adapt to a post-pandemic environment.
They made the remarks after the Montreal-based company, Canada’s largest communications and media business, announced a $680-million profit attributable to common shareholders for the first quarter ended March 31.
BCE and Bell chief executive Mirko Bibic told analysts that overall Bell Media viewership was up 25 per cent as Canadians watched CTV and specialty channels for news and entertainment.
Bibic said even Bell’s sport-related services held up, despite a lack of professional events, and thinks viewership will bounce back once events resume.
Similarly, Bibic said he expects a surge in wireless equipment sales, once consumers can return to stores that have been closed since mid-March.
“My sense is those who go out to shop are going out to shop with a purpose, and that’s to buy rather than to just browse,” Bibic said.
But the outlook for Bell’s business customers is more complex, because some small- to mid-size enterprises may be unable to recover fully from the pandemic shut-downs while others may continue to make greater use of communications services by employees, suppliers and clients.
“While we have seen an increase in pricing concessions to customers, particularly in the SME space, as well as lower data equipment and business service solutions sales to larger enterprise customers, we also provide critical connectivity services needed to maintain business continuity,” Bibic said.
Chief financial officer Glen LeBlanc said that Bell’s performance in the early part of the first quarter showed that it was on track to meet 2020 financial estimates, which have now been withdrawn because of COVID’s disruption.
“The financial impact of COVID-19 was limited in Q1 as government lockdown measures and related shutdown of businesses only went into effect towards the end of the quarter,” LeBlanc said.
He said total service revenue remained positive for the full quarter but product revenue was down 10 per cent compared with a year earlier.
“This was a result of a significant reduction in wireless customer transactions attributable to retail channel disruptions as well as lower business wireline data equipment sales, given last year’s strength and the current economic environment,” LeBlanc added.
Earlier, BCE Inc. reported its first-quarter profit fell compared with a year ago as the company was hit by derivative losses related to a hedging program, while the pandemic took a bite out of its revenue.
The company said its profit attributable to common shareholders was 75 cents per share, compared with $740 million or 82 cents per share in last year’s first quarter.
Operating revenue for the quarter totalled $5.68 billion, down from $5.73 billion as the pandemic affected all of BCE’s Bell Canada operating segments.
On an adjusted basis, BCE said it earned 80 cents per share up from 77 cents per share a year ago.
Analysts on average had estimated BCE would earn an adjusted profit of 76 cents per share and nearly $5.68 billion in revenue, according to financial markets data firm Refinitiv.
— by David Paddon in Toronto
This report by The Canadian Press was first published May 7, 2020
Companies in this story: (TSX:BCE)
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