Bell Aliant Inc.’s network for its digital TV is starting to help the telecom company’s revenues, CEO Karen Sheriff said Tuesday after the company posted a quarterly net profit of $92 million.
Sheriff said Bell Aliant continued to expand its fibre optic network in the quarter and is on target to reach its goal of about 650,000 premises by the end of 2012.
“We’re beginning to get sufficient scale to see the impact on the overall revenue line,” Sheriff told a conference call.
The Halifax-based telecom now has 107,000 IPTV customers and the IPTV revenue grew by $10 million to $21.4 million, the largest area of revenue growth in the quarter. Internet revenue in the quarter increased nearly $10 million to $132 million.
Bell Aliant (TSX:BA) increased its net profit by almost 22 per cent to $92 million due to lower restructuring charges compared with a net profit of $76 million in the same quarter last year.
“I’m very pleased with the continuing, steady progress we’re making in turning our revenue and profitability trajectory around,” Sheriff told financial analysts.
Bell Aliant has said that its fibre optic network is key to the company’s long-term profitability. The network allows faster downloads of data such as music or movies and the ability to share video and photos faster. It is also used for high-definition television.
“While we expect 650,000 premises to have access to our FibreOP services by the end of this year, we will still have more to do. I expect to announce our plan for further expansion in early 2013.”
At the end of September total coverage reached 621,000 premises, the company said.
Bell Aliant’s earnings per share were 40 cents and adjusted earnings per share were 47 cents. Revenues dipped slightly to $697 million, down three million from the same quarter in 2011.
The average analyst estimate for adjusted earnings was 45 cents per share, while net EPS was 38 cents per share, according to estimates compiled by Thomson Reuters.
Analysts estimated revenue at $692.77 million.
Total data revenue, including Internet and TV, increased $21 million, or 9.6 per cent, in the third quarter of 2012 compared with the same period in 2011.
Local telephone and access revenue was down five per cent to $297 million, while long distance revenue was down 12 per cent to $86.2 million.
Wireless revenue was up almost 10 per cent to $28.4 million.
RBC Capital Markets analyst Drew McReynolds said Bell Aliant’ results were in line with his expectations. McReynolds had estimated revenue of $693 million.
Bell Aliant is on track with its rollout of its fibre optic network by the end of 2012, he said in a research note.
Bell Aliant provides telephone, Internet, television and other services to customers in Canada’s six most eastern provinces and is partly owned by BCE Inc. of Montreal (TSX:BCE).
On the Toronto Stock Exchange, Bell Aliant shares were down 17 cents at $26.93 in early afternoon trading.