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BCE Profit Climbs 46%; Boosts Dividend

BCE Inc. (BCE,BCE.TO: Quote), Canada's largest communications company, said Thursday that its fourth quarter profit rose 46% from last year, helped by strong growths at its wireless and media divisions as well as a hefty investment gain.

The Montreal-based company and parent of Bell Canada reported net income for the fourth quarter of C$708 million or C$0.91 per share, compared to C$486 million or C$0.62 per share for the year-ago quarter.

The latest quarter results include a C$248 million non-cash gain related to the company's investment in Inukshuk Wireless joint venture with Rogers Communications Inc.

Excluding that gain and other items, adjusted earnings for the quarter increased to C$0.65 per share from C$0.62 per share in the prior year quarter.

On average, 9 analysts polled by Thomson Reuters expected the company to earn C$0.66 per share for the fourth quarter. Analysts' estimates typically exclude special items.

The company's operating revenues for the fourth quarter declined slightly to C$5.16 billion from C$5.17 billion in the same quarter last year. Five analysts had a consensus revenue estimate of C$5.17 billion for the fourth quarter. Wireless postpaid net additions increased 9% to 143,834 in the fourth quarter from 131,986 last year. Smartphone users represented 64% of total postpaid subscribers at the end of 2012, compared to 48% a year ago.

The company also said it will increase its annual common stock dividend from C$2.27 to C$2.33 per share effective with its 2013 first quarter dividend, payable on April 15 to shareholders of record on March 15. Together with the earlier C$0.10 per share increase announced in August, BCE's annual common stock dividend increase for 2013 is up 7.4%.

Looking forward, the company forecast revenue growth of flat to 2% for the full year 2013, compared to a 3% growth in 2012. Analysts currently expect the company's revenue to grow 1.10% in 2013.

The company also forecast full year 2013 earnings to be in the range of C$2.97 to C$3.03 per share.

BCE's proposed acquisition of Québec's largest independent media company Astral Media Inc. (AAIAF.PK,ACM_A.TO) is still waiting for regulatory approvals. In March 2012, BCE had agreed to buy Astral Media for C$50 per share in a deal valued at about C$3.38 billion, including C$380 million of debt. In November, the two companies amended the terms of their merger agreement and submitted a new application to the Canadian Radio-television and Telecommunications Commission after the agency rejected their original application in October.

As a result of the amendments made to the terms of the original merger agreement between Astral and Bell, the outside date for the closing of the deal has been extended to June 1, 2013 with Astral and Bell each having a further right to postpone it to July 31, 2013, if required, to obtain necessary regulatory approvals.

A break-up fee of C$150 million is payable by BCE to Astral should the deal not close before the outside date for regulatory reasons.

BCE shares are currently trading on the NYSE at $44.59, down 18 cents. On the TSX, the company's shares are currently trading at C$44.54, up C$).02.

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by RTT Staff Writer

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