Bell Canada's parent company BCE reported fourth-quarter net earnings of $632-million on Thursday.Paul Chiasson/The Canadian Press
Bell Canada parent company BCE Inc. BCE-T reported flat revenue and lower adjusted earnings in its fourth quarter, as weaker advertising weighed on its media business despite record new Crave subscribers.
The Montreal-headquartered telecom and media company posted revenue of $6.4-billion for the fourth quarter ended Dec. 31, down 0.3 per cent from a year earlier and slightly below analyst consensus of $6.5-billion. The result reflected declines in its media and Canadian telecom business, partly offset by the addition of its new U.S. fibre business.
Net earnings were up 25 per cent to $632-million, driven in part by accounting losses recorded in the prior year tied to a lower share price, as well as gains on investments this quarter related to the sale of its home-security business.
When accounting for severance, acquisition costs and taxes on various extraneous items, adjusted net earnings fell 10 per cent.
The company also issued 2026 financial guidance consistent with the three-year outlook it provided last fall, projecting revenue growth of 1 per cent to 5 per cent, free cash-flow growth of 4 per cent to 10 per cent, and no change to the annualized common dividend for its current financial year.
The outlook reflects expected growth in BCE’s new business segments, including its artificial intelligence and U.S. fibre offerings, while also accounting for declines in its legacy businesses and an uncertain wireless pricing environment.
After cutting its dividend last year, the company has set out to reset its balance sheet by paying down debt, realizing cost savings and growing free cash flow.
“Last year was the year to reset the strategy, both on the capital market side and the operational side,” BCE chief executive officer Mirko Bibic said in an interview Thursday morning. “Momentum is starting to build against that broader plan.”
In notes to investors Thursday morning, Desjardins analyst Jérome Dubreuil said the guidance was “modestly below expectations,” while Bank of Nova Scotia analyst Maher Yaghi called it “subdued but achievable.”
Shares of BCE Inc. closed 2.56 per cent lower on the Toronto Stock Exchange.
Fourth-quarter operating revenue for the company’s media division was down 3.4 per cent, owing to lower advertising revenue, even as Crave subscriptions rose 26 per cent after the success of the streaming platform’s original hockey romance Heated Rivalry and French-language drama Empathie. For the full financial year, media operating revenue was flat at $3.15-billion compared to 2024.
Free cash flow in the quarter was down 75 per cent to $225-million, owing to higher capital expenditures and decreased cash flows from operating activities during the quarter, in line with analyst expectations. However, on the full-year basis, cash flow was up 10 per cent.
Bell added 56,000 net new postpaid mobile phone subscribers in the quarter, down slightly from last year but beating analyst expectations. The company lost nearly 3,400 net prepaid customers, a slight improvement from last year.
Churn – the rate of customer turnover on a monthly basis – improved among Bell’s postpaid wireless customers, while average revenue per user – or ARPU, an important industry metric that measures the value of each subscriber – dropped slightly during the quarter.
Internet revenue grew 16.6 per cent, supported by the contribution from Ziply Fiber, the U.S.-based internet company that BCE acquired last August. However, the company added just 13,000 net new retail internet subscribers, down 61 per cent from last year. This includes a decline in net new fibre customers, as BCE’s network buildout was reduced this year compared to the last.
The company lost about 5,000 television subscribers and 43,000 home phone subscribers in the quarter, similar to last year.
Separately, ahead of earnings, the company said on Wednesday it had laid off 60 employees in its Bell Media division, as part of a continuation to changes that led to the company cutting 650 roles last November. Bell said that no newsgathering or reporting roles were affected, saying a previous Unifor release claiming 11 journalists had been laid off was incorrect.