BT share price drops as it reveals reduced revenue but higher profit

Caitlin Morrison
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BT Group recently agreed a TV deal with Sky (Source: Getty)

BT's revenue dropped in the third quarter, while pre-tax profit rose by quarter.

The figures

Revenue fell three per cent in the three months to 31 December, dropping to £5.97bn from £6.13bn the year before.

Profit before tax increased by 25 per cent from £526m to hit £660m, and operating profit was up 17 per cent at £854m.

Basic earnings per share rose 32 per cent, from 3.8p to 5p.

Order intake, on a rolling 12-month basis, was up 12 per cent to £3.59bn for business and public sector, but down 38 per cent to £1.26bn for wholesale and ventures and down 25 per cent to £3.73bn for global services, "reflecting market conditions", the company said.

Shares in the group dropped 2.8 per cent in early trading.

Why it's interesting

BT had a rough 2017, kicking off last year with the revelation of an accounting scandal in its Italian arm.

Today, however, chief executive Gavin Patterson struck a positive note as he highlighted the recently agreed reciprocal wholesale TV deal with Sky. The deal will allow BT to deliver a variety of sports and entertainment channels to its BT TV platform by early 2019.

He also said the triennial valuation of the BT Pension Scheme "is proceeding and constructive discussions continue with the BTPS Trustee". The telecoms firm announced plans to close its scheme in November last year, and since then has been consulting on the changes - an attempt to reduce its pension deficit was dealt a blow due to a High Court ruling last month.

Patterson said BT still expects to complete the valuation in the first half of 2018 and said the "aim remains to deliver fair, flexible and affordable pensions to all of our employees".

What BT said

"Our third quarter financial results are broadly in line with our expectations and we remain confident in our outlook for the full year. We continue to improve our customer experience metrics across the group, with our sixth successive quarter of improved customer perception," said chief executive Gavin Patterson.

"We continue to work closely with the UK government, Ofcom and our customers to expand the deployment of fibre and Openreach recently announced plans to accelerate our FTTP deployment to three million premises by the end of 2020.

"We are delivering against our strategy, capitalising on opportunities and responding to market challenges with a robust set of actions. Looking ahead, we're confident in the steps we are taking to improve the performance of BT for all our stakeholders."

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