Bell Aliant Q1 2012 earnings up on increased FTTH footprint, IPTV revenues

Bell Aliant (Toronto: BA-UN.TO) reported Q1 2012 net income of CAD 87 million (USD 88 million), up from CAD 84 million (USD 85 million) in the same period a year ago, a result of strong IPTV and next-gen service growth in the quarter.

However, revenue remained flat year-on-year at CAD 682 million (USD 693 million) in the three months ended 31 March 2012, while quarterly EBITDA fell by 1.2 percent to CAD 325 million (USD 330 million).

The service provider's earnings per share and adjusted earnings per share in the quarter were CAD 0.38 (USD 0.39) and CAD 0.45 (USD 0.46) respectively, up from CAD 0.37 (USD 0.37) and CAD 0.44 (USD 0.45) in the same quarter of 2011.

A key point in its Q1 growth cycle was its ongoing buildout of both IPTV services and its FibreOP Fiber to the Home (FTTH) network into a number of additional markets throughout the quarter.

"FibreOP is playing a key role in the turnaround, with our first quarter results particularly strong in FibreOP territories," said Karen Sheriff, president and chief executive officer, Bell Aliant, in the earnings release. "Over 500,000 premises in Atlantic Canada now have access to FibreOP services."

Here's a breakdown of the service provider's key metrics:

  • Wireline losses: As expected, local voice service and long distance revenues service and long distance revenues declined CAD 14 million (USD 14 million) and CAD 9 million (USD 9.14 million), respectively, in the Q1 2012. Overall Network Access Services (NAS) were down 5.4 percent at the end of March 2012 from Q1 2012, due to cable competitors luring away subscribers with their own triple play bundle packages. However, it did narrow residential net NAS losses to 26,000 from 29,000 Q1 2011. Meanwhile, business net NAS declines increased to 9,000 in the first quarter of 2012 from 4,000 in the same quarter of 2011, a factor it attributes to wholesale and enterprise contract losses in addition to the competitive activity and business customers' movement to IP-based technologies.
  • Broadband, Internet services: Internet revenue increased CAD 9 million (USD 9.14 million), or 7.5 percent, in Q1 2012 over Q1 2011. The service provider reported that residential high-speed average revenue per customer (ARPC) grew 7.7 percent from Q1 2011. Broadband subscribership also rose in Q1. At the end of March, Bell Aliant had 902,000 broadband customers, up 2.8 percent from the same period in 2011. Its bet on FTTH continued to also pay off in Q1 as it added 13,000 FibreOP customers, reaching 59,000 total customers at the end of March. A good portion of the FibreOP net adds were customers migrating from DSL and Fiber to the Node (FTTN)-based networks.
  • Video services: Fueled by new applications like its Facebook TV app, IPTV revenue continued to rise in the quarter with CAD 17 million (USD 17.3 million) in revenues and a total of 85,000 customers at the end of March 2012. FibreOP TV specifically added 11,000 new customers in the quarter to reach 52,000, a portion of which included customers migrating from Bell Aliant TV. Overall, Bell Aliant added 8,000 TV subscribers in Q1 2012, up from 4,000 in the same quarter last year.

The service provider said it is sticking with the revenue and growth forecasts it issued in February.

In late morning trading on the Toronto stock exchange, Bell Aliant's stock was down 1.95 percent at CAD 26.18 (USD 27).

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