BT Reports Better-Than-Expected Profit on Demand For Services, Broadband
BT Group Plc (BT/A), the U.K.’s largest Internet service provider, reported second-quarter operating profit that beat analysts’ estimates, helped by its Global Services unit and more broadband subscribers.
Earnings before interest, taxes, depreciation, amortization and costs from job cuts rose 3 percent to 1.5 billion pounds ($2.4 billion), the London-based company said today in a statement. Analysts had estimated 1.45 billion pounds, according to a Bloomberg survey. The stock rose as much as 3.1 percent in London trading.
The operator said this week it will accelerate its 2.5 billion-pound rollout of fiber broadband by one year as it steps up competition with rivals including Virgin Media Inc. (VMED) and Fujitsu Ltd. (6702) The company is counting on high-speed broadband services to offset declining sales from traditional fixed-line offerings. The company today reiterated its full-year forecast.
“We think we can do all,” BT Chief Executive Officer Ian Livingston said in an interview on Bloomberg Television’s “Countdown” program. “With the cash we’re generating, we can put money into the pension scheme, we can invest for the future, and we’re paying a higher dividend.”
Second-quarter revenue declined 10 percent after BT took a 410-million-pound charge due to a regulatory ruling in Germany, the company said. Sales excluding the charge fell 2 percent to 4.89 billion pounds ahead of estimates.
“The company has beaten consensus across the board,” Saeed Baradar, a telecommunications sales specialist at Societe Generale in London, wrote in a note. “They just keep on delivering.”
BT rose as much as 5.8 pence to 193.2 pence as was up 2.4 percent at 191.9 pence as of 8:12 a.m.
BT faces potential competition from Fujitsu, Japan’s biggest computer-services provider, which said this year it wants to tap BT’s infrastructure to build a rival fiber network to 5 million homes and businesses for as much as 2 billion pounds.
“It’s our own plan, we are actually doing it ourselves,” Livingston said. “Actually Fujitsu haven’t even started doing anything and really among the list of concerns of mine, I think that’s not a huge one.”
The company said its pension deficit increased to 2.5 billion pounds through September, compared with a deficit of 1.4 billion pounds at the end of March, as global equities declined.
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