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BCE Inc.(TSX:BCE) increased its profits despite a decrease in revenue last quarter, as the telecom giant began to feel the financial impact of significant job cuts implemented earlier this year.
Revenues for the quarter ending June 30 fell by one percent to $6.01 billion compared to the same period the previous year. Chief Executive Mirko Bibic attributed this decline to competitive pricing from rival mobile and internet providers and the closure of 107 The Source stores, which represented 39 percent of the electronics retailer’s locations.
The profit increase was driven by reduced expenses, including lower purchasing obligations, severance costs, and acquisition-related expenses, according to Bell.
Bibic highlighted that despite the revenue decline, the company maintained a focus on margin-accretive subscriber growth and cost reduction in a highly competitive market. BCE saw a 1.3 percentage-point improvement in its adjusted earnings margin year-over-year.
In February, BCE announced a reduction of approximately 4,800 jobs, or about nine percent of its workforce, as part of a restructuring effort. This restructuring included the elimination of several television newscasts, including those at CTV and BNN Bloomberg, and the sale of 45 Bell Media-owned regional radio stations.
Desjardins analyst Jerome Dubreuil characterized BCE’s financial results as “slightly positive,” noting that improved margins helped offset the revenue decline. He remarked that the company’s restructuring plan is becoming more evident, with future value creation likely to depend on stringent cost control amid ongoing revenue challenges.
For the second quarter, earnings amounted to 59 cents per share, up from 37 cents per share the previous year. Adjusted earnings decreased to 78 cents per share from 79 cents per share last year, aligning with analysts’ projections according to LSEG Data & Analytics.
