MONTREAL - BCE Inc. (TSX:BCE) (NYSE:BCE) reported first quarter results in line with analyst expectations on Thursday, while announcing a significant cut to its dividend as the telecom giant grapples with a challenging economic and competitive landscape.
The company reported adjusted earnings per share of C$0.69, matching the analyst consensus estimate. Revenue came in at C$5.93 billion, also in line with expectations.
However, BCE made the notable decision to reduce its annualized common share dividend to C$1.75 per share from C$3.99 previously. The company cited the need for "greater financial flexibility and a prudent approach to capital management" given the current economic, regulatory and competitive environment.
"Bell’s Q1 results reflect intense price competition and sustained regulatory uncertainty," said Mirko Bibic, President and CEO of BCE and Bell Canada. "With the current backdrop of macroeconomic and geopolitical instability, we need to stay more focused than ever on our core business and on winning customers over to Bell."
The dividend cut aims to strengthen BCE’s balance sheet, with the company targeting a net debt leverage ratio of approximately 3.5 times adjusted EBITDA by the end of 2027. BCE also announced it will terminate discounted treasury issuances under its dividend reinvestment plan.
For the first quarter, adjusted EBITDA was essentially flat year-over-year at C$2.56 billion. Free cash flow increased significantly to C$798 million from C$85 million in Q1 2024.
BCE maintained its 2025 financial guidance, forecasting revenue growth between -3% and +1% and adjusted EPS growth of -13% to -8% for the full year.
The company continues to face headwinds from slowing economic growth, intense wireless competition, and regulatory pressures. However, management expressed confidence that its strategic focus and cost discipline will position BCE to navigate the challenging environment.
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