BT set to reveal flat earnings propped up by profitable Openreach

Oliver Gill
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BT's Openreach arm generates almost double the earnings than any other single division

Analysts are anticipating BT to report muted first quarter figures on Friday, with City expectations that revenue and profits will be in line with 2016.

Company provided consensus analyst forecasts suggest sales of £5.8bn and earnings of £1.8bn, almost identical to the figures published a year ago.

BT has agreed a deal with regulators to give its infrastructure arm Openreach greater independence from the wider group. Openreach has asked its customers – which include BT as well as other telecoms providers like Vodafone, TalkTalk and Sky – for feedback on investment plans for the UK network.

Read more: Openreach says it will take until 2021 to remove two letters

Despite being distanced from the FTSE 100 group, Openreach's figures are consolidated and provide an important boost to BT’s bottom line.

Five of BT’s largest divisions – retail, business, international, mobile firm EE and Openreach – are expected to generate similar revenues: between £1.1bn to £1.2bn.

But the profitability of Openreach dwarfs the others. Analysts expect £616m of earnings during the first quarter, compared with between £243m-£329m from BT’s EE, retail and business divisions.

Earlier this month BT revealed an Openreach rebranding exercise, with plans to remove the BT logo from all vans by 2021.

BT group profit before tax is expected to be £751m, compared with a reported figure of £717m in the first quarter of 2016.

Read more: BT's Openreach checks £1.5bn Carillion deal

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