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Aug 6, 2020

BCE profit drops 64% as media, wireless suffer in pandemic

BCE profit drops 64% as pandemic weighs on media, wireless

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BCE Inc.'s (BCE:CT) profit sank 64 per cent in the second quarter as COVID-19 stung the giant telecommunications company, whose media division was particularly hard hit.

Net earnings in the three months ending June 30 was $294 million, compared to $817 million a year earlier. On an adjusted basis, BCE earned $0.63 per share -- missing the average analyst estimate by six cents.

BCE's bottom line was weighed down by $452 million in impairment charges on its radio and television assets. Revenue fell 31 per cent year-over-year at Bell Media, which owns BNN Bloomberg, amid what the company described a "material" drop in advertising proceeds as major league sports were suspended during the quarter and as other live events were cancelled. BCE said cost-management helped to partly offset the revenue erosion.

The company's key wireless division also suffered as a result of the pandemic as revenue fell 11 per cent. Postpaid net new wireless subscriber additions totalled 21,632 in the quarter, down sharply from a year earlier when almost 103,000 customers were added. In a release, BCE blamed the downturn on store closures and reduced promotional activity.

BCE's wireline business stood out for its stability, as revenue inched down just 1.0 per cent to $3.04 billion.

BCE opted not to present financial forecasts, after earlier suspending its outlook in May, as a result of uncertainty surrounding COVID-19. However, it said it will be able to sustain its dividend "for the foreseeable future" thanks to its liquidity position.

“As economic activity continues to build, Bell will continue generating operating momentum while maintaining the financial flexibility to drive both our national investment strategy and the BCE common share dividend,” said president and CEO Mirko Bibic in a release.