Lower costs will help Bell Aliant compete

Article Excerpt

BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $27 (Toronto symbol BA.UN; Conservative Growth Portfolio, Utilities sector; Units outstanding: 127.2 million; Market cap: $3.4 billion; Price-to-sales ratio: 2.2; SI Rating: Above Average) will cut 5% of its workforce as part of a plan to lower its costs by $60 million a year. The fund plans to invest these savings in improving the speed and availability of its Internet service. These upgrades should help it hang on to its current customers and fend off strong competition from cable companies. Meanwhile, Bell Aliant earned $93.5 million, or $0.58 a unit, in the three months ended June 30, 2009. That’s a 10.0% higher than the $85 million, or $0.53 a unit, it earned a year earlier. Revenue fell 2.9%, to $789.7 million from $813.1 million. The fund continues to pay a regular monthly distribution of $0.2417 a unit. That gives it an 10.7% annual yield. Bell Aliant is a buy. buy…