BCE's Q2 Earnings Beat Estimates on Ziply Fiber & Media Momentum

BCE Inc. BCE reported second-quarter 2026 adjusted earnings of C$0.65 per share (47 cents), up 3.2% year over year. The figure beat the Zacks Consensus Estimate by 2.2%.

Total operating revenues rose 1.5% to C$6.18 billion ($4.461 billion), topping the consensus estimate of $4.401 billion. The improvement was primarily driven by 4.3% growth in service revenue, contribution from Ziply Fiber following its acquisition, strong Bell Media performance and growth in AI-powered enterprise services.

However, product revenue declined 16.3%, mainly because last year's results included revenue from the completion of Bell's first AI Fabric data center and lower wireless device sales as more customers opted for bring-your-own-device (BYOD) plans.

Adjusted EBITDA rose 1% to C$2.70 billion. The adjusted EBITDA margin was 43.8% compared with 43.9% a year earlier, as higher operating revenues were partly offset by Ziply Fiber expenses and increased content costs at Bell Media.

Bell Canada Margin Improves Despite Revenue Decline

Bell CTS Canada operating revenues declined 4% to C$5.12 billion. The fall reflected lower service and product revenues, including the non-recurrence of G7 Summit and federal election-related revenues, ongoing legacy service erosion, a CRTC wholesale-rate adjustment and lower wireless connection fees.

Adjusted EBITDA for the Canadian segment fell 3.1% to C$2.36 billion.

However, margin improved 40 basis points to 46.1% as operating costs declined 4.7%, helped by lower device costs, the absence of prior-year data-center and G7-related costs, and cost-reduction initiatives.

BCE Fiber and Wireless Metrics Show Mixed Trends

Postpaid mobile phone net activations were 41,594, down 6.6% year over year as gross activations declined in a less active market with lower promotional intensity. Blended ARPU fell 2.3% to C$56.30, though management said ARPU was relatively stable excluding the prior-year G7 impact.

Bell CTS Canada recorded 45,271 residential FTTH Internet net additions versus 47,920 a year earlier.

Ziply Fiber contributed 9,612 FTTH net additions, its highest quarterly residential result since BCE acquired the business. Canadian video net additions improved to 8,741 from a loss of 15,851.

Bell Media Gains on World Cup and Crave

Bell Media revenues advanced 8.9% to C$918 million, driven by the FIFA World Cup, Crave growth, the Formula 1 Canadian Grand Prix and higher program sales. Advertising revenues increased 5.3%, subscriber revenues rose 6.7% and digital revenues grew 5.8%.

Crave subscriptions increased 23% to 5.07 million, with direct-to-consumer streaming subscribers up 49%.

Bell Media adjusted EBITDA rose 3.8% to C$244 million, while margin declined to 26.6% from 27.9% as operating costs increased 10.9% on sports, content and event-related spending.

BCE Cash Flow Funds AI and U.S. Fiber Expansion

Cash flows from operating activities increased 11% to C$2.16 billion.

Capital expenditures rose 41.5% to C$1.08 billion on Bell AI Fabric and Ziply Fiber investment, pushing free cash flow down 9.5% to C$1.04 billion.

Bell AI Fabric had about 335 MW of contracted capacity, including the 300 MW Saskatchewan facility. The first Saskatchewan phase remains scheduled for the first half of 2027, while most of roughly C$1.3 billion of expected 2026 project capex is slated for the second half.

BCE ended the quarter with C$4.6 billion of available liquidity and a 3.71 net debt leverage ratio.

Bell Reaffirms 2026 Outlook and Leverage Target

BCE reaffirmed 2026 guidance for revenue growth of 1% to 5% and adjusted EBITDA growth of 0% to 4%. Management continues to expect capital intensity of about 20%, supported by investment in the Saskatchewan AI data center.

Adjusted EPS is still projected to decline 5% to 11% while free cash flow is expected at C$2.10 billion to C$2.30 billion.

BCE maintained its C$1.75 annualized common dividend and remains on track for a 3.5 net debt leverage ratio by the end of 2027.

BCE’s Zacks Rank

BCE currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Peers Firms

TELUS Corporation TU reported second-quarter 2026 adjusted earnings per share of C$0.16, down 27% from C$0.22 a year ago. Adjusted net income fell 26% to C$254 million, while operating revenues and other income declined 3% to C$4,929 million, pressured by weaker TELUS Digital results, lower mobile equipment revenues and reduced other income.

Lumen Technologies, Inc. LUMN reported a second-quarter 2026 adjusted loss (excluding special items) of 7 cents per share, narrower than the Zacks Consensus Estimate of a loss of 15 cents. The company reported adjusted loss per share of 3 cents in the prior-year quarter.

Quarterly total revenues were $2.805 billion, down 9.3% year over year, but topped the Zacks Consensus Estimate by 2%. 

Rogers Communications Inc RCI reported second-quarter 2026 adjusted earnings of 83 cents per share, topping the Zacks Consensus Estimate and up 1.2% year over year. Revenues of $4.06 billion surpassed the consensus mark by 2.45% and increased 7.6% year over year. In domestic currency (Canadian dollar), RCI’s total revenues increased 7.7% year over year to C$5.62 billion, primarily driven by growth in the Media businesses. Total service revenues increased 8% year over year to C$5.06 billion in the quarter. Shares for RCI are up 2.5% in the past year.

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