BCE Inc. BCE reported first-quarter 2026 adjusted earnings of C$0.63 per share (46 cents), down 8.7% year over year. The Zacks Consensus Estimate was pegged at 43 cents.
Quarterly total operating revenues rose 4% to C$6.17 billion ($4.4 billion), reflecting growth in both service and product revenue. The rise in service revenue was mainly driven by the addition of Bell CTS U.S. — including revenue from Ziply Fiber — and growth in Bell Media. This was partly offset by lower revenue at Bell CTS Canada compared to the previous year. The consensus estimate was pegged at $4.5 billion.
Operationally, BCE posted 16,947 postpaid mobile phone net subscriber activations in the quarter, a sharp turnaround from the year-ago period, as promotional intensity and bring-your-own-device activity lifted gross adds.
Shares of the company have gained 1.5% in the past year compared with the Zacks Diversified Communication Services industry's growth of 16.6%
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BCE Revenue Rises on Service and Product Growth
The top line benefited from 3.4% service revenue growth to C$5.35 billion and a 7.9% increase in product revenue to C$818 million. Segmentally, Bell CTS generated C$5.49 billion of operating revenue, while Bell Media contributed C$778 million.
Profitability expanded at the adjusted EBITDA line, which increased 2.9% to C$2.63 billion. The adjusted EBITDA margin declined 0.4 percentage points to 42.7%, as operating costs rose with the inclusion of Ziply Fiber expenses and higher activity-linked items.
Bell Operating Mix Reflects AI Momentum and Cost Pressures
Bell CTS Canada posted operating revenue of C$5.25 billion, up 0.1% year over year. Within that, service revenue declined 1.2% to C$4.43 billion, weighed by ongoing legacy wireline and TV erosion, heavier residential discounting and softer wireless monetization.
BCE, Inc. Price, Consensus and EPS Surprise
BCE, Inc. price-consensus-eps-surprise-chart | BCE, Inc. Quote
Product revenue improved, supported by delivery activity tied to Bell AI Fabric, even as wireless product revenue declined 6.3% due to fewer contracted device sales amid a higher BYOD mix. Bell Business Markets revenue increased 9.7% year over year, driven by 113% growth in AI-powered solutions revenue tied to Ateko, Bell Cyber and Bell AI Fabric.
BCE Subscriber Trends Improve Across Key Connectivity Lines
Wireless metrics showed a meaningful year-over-year rebound. Postpaid net activations were 16,947 against a net loss of 9,598 a year ago, driven by a 20.6% increase in gross activations. Blended ARPU declined 0.8% to C$56.61, reflecting heightened pricing pressure and discounting, while postpaid churn rose to 1.34% in a more competitive market.
On the broadband side, total high-speed Internet net activations were 17,782, up from 3,744 in the prior-year quarter, with residential FTTH net activations totaling 49,525 across the footprint. Video net activations swung to a positive 9,888 from a net loss last year, while retail residential NAS net losses improved to 45,749, reflecting fewer deactivations in Canada despite ongoing technology substitution trends.
Bell Media Offsets Ad Softness With Streaming and Digital
Bell Media’s revenue increased 0.4% year over year, driven by stronger subscriber revenue, which grew 11.8% due to continued Crave and sports direct-to-consumer growth, plus a retroactive distributor revenue adjustment. Advertising revenue fell 12.8% amid weaker demand for traditional ads, lower audio advertising after previous divestitures and shifting spending toward the main Olympic broadcaster.
Digital revenue rose 8% year over year, while digital video advertising revenue surged 32% thanks to increased adoption of ad-supported tiers and gains in connected TV. Total Crave subscriptions increased 25% to 4.74 million, although adjusted EBITDA declined 2.5% to C$155 million due to contractual content cost inflation and higher operating expenses offsetting efficiencies.
BCE Cash Flow Holds Up as Taxes and Capex Rise
Cash flows from operating activities fell 26.9% to C$1.15 billion, largely reflecting C$542 million of income taxes paid tied to significant divestitures, alongside higher interest paid. Capital expenditures increased 15.4% to C$841 million, driven by Ziply Fiber’s FTTP expansion and spending related to Bell AI Fabric facilities.
Even with higher capex, free cash flow increased 0.8% to C$804 million. On the balance sheet, net debt was C$40.30 billion with a net debt leverage ratio of 3.76 at quarter-end, and available liquidity was C$4.3 billion, including C$1.37 billion in cash.
Bell Reaffirms 2026 Targets and Maintains Dividend Plan
Management reaffirmed full-year 2026 guidance, including revenue growth of 1% to 5% and adjusted EBITDA growth of 0% to 4%.
The company continues to expect capital intensity of approximately 20% for 2026, reflecting about C$1.3 billion of incremental capital expenditures tied to the Saskatchewan AI data centre build.
BCE also maintained its expectations for adjusted earnings decline of (11%) to (5%) and free cash flow of C$2.10 billion to C$2.30 billion for 2026.
The board declared a quarterly common share dividend of C$0.4375, payable July 15, 2026, to shareholders of record as of June 15, 2026.
BCE’s Zacks Rank
BCE currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Peers Firms
Rogers Communications Inc RCI reported first-quarter 2026 adjusted earnings of 74 cents per share, beating the Zacks Consensus Estimate by 1.37% and up 7.2% year over year. RCI’s revenues of $4 billion beat the consensus mark by 1.39% and increased 15.3% year over year.
In domestic currency (Canadian dollar), adjusted earnings increased 2% year over year to C$1.01 per share. Total revenues increased 10.2% year over year to C$5.48 billion, primarily driven by growth in the Media businesses. Total service revenues increased 10.5% year over year to $4.91 billion in the quarter. Shares for RCI are up 43.6% in the past year.
Verizon Communications VZ reported adjusted earnings of $1.28 per share for the first quarter of 2026, which jumped 7.6% year over year and beat the Zacks Consensus Estimate of $1.22 by 4.9%. Verizon’s total operating revenues rose 2.9% from the year-ago quarter to $34.44 billion but missed the consensus mark of $35.03 billion by 1.7%. The quarter featured 341,000 broadband net additions, led by fixed wireless access growth. Shares for VZ are up 7.8% in the past year.
Lumen Technologies, Inc. LUMN reported a first-quarter 2026 adjusted loss (excluding special items) of 47 cents per share, significantly wider than the Zacks Consensus Estimate of a loss of 6 cents. The company reported adjusted loss per share of 13 cents in the prior-year quarter. Quarterly total revenues were $2.899 billion, down 9% year over year, but topped the Zacks Consensus Estimate by 2.1%.
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This article originally published on Zacks Investment Research (zacks.com).