BCE Q4 Earnings Beat Despite Revenue Headwinds, Fall Y/Y, Shares Tank

BCE Inc. BCE reported fourth-quarter 2025 adjusted earnings per share (EPS) of C$0.69 (49 cents) compared with C$0.79 in the prior-year quarter. The Zacks Consensus Estimate was pegged at 45 cents.

Quarterly total operating revenues dipped 0.3% year over year to C$6.4 billion ($4.6 billion). The consensus estimate was pegged at $4.7 billion. The decline is attributed to a 15% fall in Product revenues, which totaled C$965 million, amid 2.9% growth in Service revenues, which came in at C$5.4 billion. Service revenue rose mainly due to the addition of Bell CTS U.S., including Ziply Fiber since the Aug. 1, 2025, acquisition, partly offset by declines at Bell CTS Canada and Bell Media.

For 2025, BCE’s operating revenue edged up 0.2% to C$24.5 billion. BCE declared a quarterly dividend of C$0.4375 per share, reaffirming its commitment to income investors, payable April 15, 2026, to shareholders on record as of March. 16, 2026. 

For 2026, management expects higher revenue and adjusted EBITDA, continued contribution from Ziply Fiber, growth in AI-powered enterprise solutions, stable capital expenditures with lower capital intensity and higher free cash flow, despite lower adjusted EPS. Importantly, BCE’s 2026 guidance aligns with its three-year roadmap toward 2028, emphasizing sustainable cash flow growth rather than short-term earnings expansion.

In response to weak top and bottom-line results, BCE’s shares declined 2.9% and closed the trading session at $25.57 on Feb. 5. Shares of the company have gained 15.5% in the past year compared with the Zacks Diversified Communication Services industry's growth of 19.2%.

Segmental Results

Bell CTS segment, encompassing BCE’s wireless and wireline operations in Canada and the United States, delivered C$5.7 billion in revenue, up 0.2% year over year, on the back of higher service revenue amid soft product revenue. The rise in service revenue was driven by the contribution from Bell CTS U.S., partially offset by lower revenue from Bell CTS Canada.

Within the Bell CTS unit, Bell CTS Canada faced ongoing revenue headwinds, with operating revenue declining 3.9% year over year to C$5.5 billion, hurt by slowdowns in both product and service sales. Bell CTS Canada product revenue fell 15% to C$965 million, mainly due to lower mobile device sales from higher BYOD activations and the timing of large enterprise wireline equipment deals. Service revenue fell 1.1% to C$4.5 billion. Pressure came from legacy wireline declines, lower ARPU and aggressive discounting, partially offset by subscriber growth and expanding AI-powered enterprise services via Ateko and Bell Cyber.

Postpaid net additions dipped slightly to 56,124 as weaker gross adds from a softer market and slower population growth were largely offset by improved churn, which fell 17 basis points (bps) to 1.49% on better retention. Prepaid subscriber losses narrowed to 3,474 in the fourth quarter, driven by lower churn (down 22 bps to 5.93%) and slightly higher gross activations.

A strategic move in 2025 was BCE’s acquisition of Ziply Fiber, forming the new Bell CTS U.S. segment. It reported operating revenues of C$232 million, driven by Internet revenues from residential, business and wholesale broadband services delivered over Ziply Fiber’s expanding FTTP network and IP broadband revenues from commercial Ethernet, dedicated Internet and other data transport solutions. Since its August 2025 inception, Bell CTS U.S. generated C$392 million in revenue and C$171 million in adjusted EBITDA, immediately aligning with BCE’s margin profile.

BCE, Inc. Price, Consensus and EPS Surprise

BCE, Inc. price-consensus-eps-surprise-chart | BCE, Inc. Quote

Bell Media’s performance remained under pressure, with operating revenue down 3.4% to C$804 million, affected by weak advertising amid strong subscriber revenues and synergies from the Sphere Abacus buyout. Advertising revenue declined 11.1% year over year due to softer demand for traditional advertising, particularly on conventional and specialty channels and lower audio revenues following the divestiture of 45 radio stations, partly balanced by higher digital video advertising revenue. Subscriber revenue rose 1.5%, driven by continued growth in Crave and sports direct-to-consumer streaming subscribers.

Total digital revenue increased 3%, supported by growing Crave and sports DTC subscribers and higher digital video ad revenue from ad-supported tiers, Connected TV and FAST channels.

Other Details

BCE’s adjusted EBITDA rose 2.3% year over year to C$2.66 billion, anchored by contributions from Bell CTS U.S., offsetting declines of 0.9% and 10.7% at Bell CTS Canada and Bell Media, respectively.

Adjusted EBITDA margin expanded by 100 bps to 41.6%, the highest fourth quarter margin in over 30 years, driven by lower operating costs, workforce reductions, automation efficiencies and reduced exposure to low-margin product sales.

Capital expenditures jumped 36.8% to C$1.3 billion, primarily driven by Ziply Fiber’s U.S. FTTP expansion. The year-over-year increase was aided by C$260 million in U.S. investments to expand Ziply Fiber’s FTTP network and higher Bell CTS Canada capex due to spend timing.

Cash Flow

Operating cash flow fell 16.8% to C$1.6 billion, mainly due to higher cash taxes and weaker working capital, partly offset by higher adjusted EBITDA and lower interest payments. Free cash flow plunged 74.3% to C$225 million, reflecting higher capex and lower operating cash flow, excluding acquisition-related and other costs.

2026 Outlook

For 2026, management anticipates revenue growth of 1-5%. Adjusted EBITDA is expected to grow in the 0-4% range. Free cash flow is forecasted in the band of 4% to 10%.

Adjusted EPS growth is now likely to be between (11%) and (5%).

Earlier, management had adjusted the annual dividend to C$1.75 per share from C$3.99, reinforcing the balance sheet while preserving flexibility amid economic uncertainty.

BCE’s Zacks Rank

BCE currently carries a Zacks Rank #3 (Hold).

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

Recent Performance of Some of the Peers

Rogers Communications Inc RCI reported fourth-quarter 2025 adjusted earnings of $1.08 per share, which beat the Zacks Consensus Estimate by 10.2% and increased 3.8% year over year. Revenues of $4.43 billion beat the consensus mark by 1.31% and increased 13% year over year. In domestic currency (Canadian dollar), adjusted earnings jumped 3.4% year over year to C$1.51 per share. Total revenues increased 13% year over year to C$6.17 billion, primarily driven by growth in the Media businesses.

Lumen Technologies, Inc. LUMN reported a fourth-quarter 2025 adjusted earnings (excluding special items) of 23 cents per share, which was significantly higher than the Zacks Consensus Estimate of a loss of 21 cents. The company reported adjusted loss per share of 9 cents in the prior-year quarter. Quarterly total revenues were $3.041 billion, down 8.7% year over year and missed the Zacks Consensus Estimate by 1.4%.

Verizon Communications VZ reported solid fourth-quarter 2025 results, with both adjusted earnings and revenues surpassing the respective Zacks Consensus Estimate on healthy mobility and broadband demand trends. Quarterly total operating revenues improved 2% to $36.38 billion with higher wireless equipment revenues driven by targeted pricing actions, customer growth, sales of perks and add-on services and growth in fixed wireless access. The top line beat the consensus estimate of $35.94 billion.

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