Low dollar signals pricier smartphones in the future, BCE CEO says

Consumers can expect to pay more for their smartphones soon, the CEO of the parent company of Bell Canada suggested on Thursday as the loonie continues to hover below the 75 cent US mark.

See Full Article

"The Canadian dollar weakness -- it does probably foreshadow some price increases from our manufacturers at some point," said George Cope on a conference call with analysts after BCE Inc. (TSX:BCE) released its fourth-quarter results.

Those higher device costs "obviously, in the end, get passed through to the consumer," said Cope.

The loonie rose above 73 cents US for the first time this year on Thursday morning after closing at 72.61 cents US Wednesday.

It's likely BCE has already tried to account for creeping costs as it pays for devices in US dollars, said Dave Heger, a senior equity analyst at Edward Jones.

Bell recently hiked prices on monthly contracts by $5 for new customers, and lowered savings for those signing new contracts who already own their own device.

Cope said the company implemented those increases mostly to help it make capital investments.

He downplayed any further impact from the lower loonie, saying the company has some foreign exchange hedging programs in place and continues to enjoy strong consumer demand in Ontario, Quebec and Eastern Canada.

There was some good news for investors. BCE announced it will be raising its dividend to shareholders by five per cent, starting with the next payment on April 15. The annualized dividend will rise to $0.6825 per share each quarter, up from $0.65 a quarter.

The company is projecting its adjusted earnings per share in 2016 will be in a range from $3.45 to $3.55, up from with $3.36 in 2015. Revenue is expected to grow by one to three per cent this year, in line with the 2015 growth rate.

BCE stock moved up .87 per cent on the TSX/S&P index mid-morning.

BCE reported $496 million of net income for the fourth quarter -- down 8.5 per cent from $542 million a year before. The company attributed the lower profit to higher severance and other costs during the three months ended Dec. 31, totalling $152 million.

The adjusted net earnings -- which are one of BCE's key meaures of financial performance -- met analyst estimates at 72 cents per share. But the net income fell short at 58 cents per common share, down from 64 cents a year earlier.

BCE's revenue was $5.6 billion, in line with estimates compiled by Thomson Reuters and up 1.4 per cent from the fourth quarter of 2014.

Most of the revenue came from BCE's telecom business, including Bell Canada, with Bell Media contributing only $816 million.

In a time of many media companies, including BCE, implementing cost-cutting measures, it was a pleasant surprise to see the media division post a profit, said Heger.

Despite the company's strong economic outlook, Cope still said BCE could benefit from an increase in the exchange rate.

"Clearly, we'd prefer a little stronger dollar going forward," Cope said.



Advertisements

Latest Economic News

  • B.C. premier and jobs minister sued by fired LNG advocate claiming $5M

    Economic CTV News
    VANCOUVER -- British Columbia's fired liquefied natural gas advocate is suing Premier John Horgan, the province's jobs minister and a New Democrat MP in a lawsuit claiming $5 million in damages. Gordon Wilson alleges in a statement of claim filed in B.C. Source
  • Millennials in Atlantic Canada most optimistic about owning homes

    Economic CTV News
    Do millennials think they can afford to buy a home? If they live in Atlantic Canada, the answer is a lot more likely to be yes. That’s according to a new online survey of 1,000 Canadians aged 25 to 30, conducted by Leger Marketing from real estate firm Royal LePage. Source
  • Can millennials afford to buy a home? It depends where they live

    Economic CTV News
    Do millennials think they can afford to buy a home? If they live in Atlantic Canada, the answer is a lot more likely to be yes. That’s according to a new online survey of 1,000 Canadians aged 25 to 30, conducted by Leger Marketing from real estate firm Royal LePage. Source
  • $500K hardship fund for former Sears Canada employees approved by judge

    Economic CBC News
    A judge has approved a hardship fund for former Sears Canada employees that will come from a pool of money set aside to pay bonuses for key employees. The $500,000 fund will help former employees facing difficulty who would have otherwise been eligible for severance payments when they lost their jobs at the retailer. Source
  • Elevated testosterone linked to 'reckless' financial trading, study finds

    Economic CBC News
    It's no secret financial traders have always been predominately male. So, when a group of researchers with the Ivey Business School at Western University in London, Ont., set out to at look at the role of testosterone on the markets, it wasn't a far-flung idea. Source
  • Brazil to ask for WTO panel to settle dispute over Bombardier subsidies

    Economic CTV News
    MONTREAL -- Brazil says it will ask the World Trade Organization to establish a dispute settlement panel after consultations with Canada failed to resolve its complaint about government subsidies to aircraft manufacturer Bombardier. The South American country said it will ask the WTO to examine more than 20 subsidy programs granted to the Montreal-based company for the development of its CSeries aircraft. Source
  • Bombardier employee in Swedish unit charged with bribery

    Economic CBC News
    A Russian employee in the Swedish branch of Canadian plane and train maker Bombardier was charged Friday with aggravated bribery and faces up to six years in jail and deportation if found guilty. Swedish prosecutor Thomas Forsberg alleges Evgeny Pavlov bribed a public servant in Azerbaijan to win a $340-million contract for a new signalling system. Source
  • Bombardier says Russian worker charged with bribery doesn't reflect its values

    Economic CTV News
    MONTREAL -- Bombardier says the filing of formal criminal charges in Sweden on Friday against a railway employee doesn't reflect its values. "We take these allegations very seriously as they assert conduct that does not reflect our values or the high standards we set for ourselves, our employees and our partners," the Montreal-based company (TSX:BBD.B) said in a statement. Source
  • Shipping firm blames fee hike on federal measures to protect right whales

    Economic CTV News
    ST. JOHN'S, N.L. - A Newfoundland shipping firm is raising its fees, blaming higher costs because of federal measures taken to protect North Atlantic right whales after a series of deaths. Oceanex Inc. says the four-per-cent "temporary marine protection surcharge" on service between Montreal and St. Source
  • TMX working with Canadian regulators on how to deal with U.S.-linked pot stocks

    Economic CBC News
    TMX Group Ltd. is seeking guidance from Canadian securities regulators as it weighs how to deal with marijuana companies listed in Canada with interests in the United States where the business remains federally illegal. "This is a complex matter which touches multiple aspects across our capital market system, and as such requires close examination and careful consideration," Toronto-based TMX Group said in a release Thursday. Source