BT shares dropped this morning after the telecoms firm revealed a three per cent drop in revenues, although profits were up 25 per cent.
"Our third quarter financial results are broadly in line with our expectations and we remain confident in our outlook for the full year," said BT boss Gavin Patterson.
"Looking ahead, we're confident in the steps we are taking to improve the performance of BT for all our stakeholders."
The stock was down more than five per cent at the time of writing.
So why did shares drop?
This is what City analysts had to say:
Orders a red flag
"BT says it is still confident in the outlook for the full year but a slide in revenues and depressed orders means there are doubts and investors could punish the stock this morning," said Neil Wilson, senior market analyst at ETX Capital.
"Market conditions look increasingly tough. A red flag is the order intake stats - on a rolling 12-month basis, it is 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 service. Deteriorating market conditions may once again raise fears that the progressive dividend is under threat."
Clouds on the horizon
"The market appears slightly sceptical of telecoms business BT’s confidence in the full year outlook after a three per cent dip in third quarter revenue," said AJ Bell Investment Director Russ Mould.
"Concerningly for a company which has pinned much of its hope for future growth on a sports rights led TV strategy the company lost 5,000 TV customers in the last three months of 2017.
Further clouds on the horizon include mounting competition for sports rights from the likes of Amazon plus the triennial valuation of a massive pension scheme.
Not a pretty picture
"It’s not a pretty picture at BT at the moment, with profits falling in most of its divisions, though there’s already a fair amount of pessimism baked into the share price," said Laith Khalaf at Hargreaves Lansdown.
"BT continues to increase the number of services it provides to its customers, which is now a key strategy in the telecoms playbook to keep consumers plugged in and paying more. In the immediate future BT’s prospects will be heavily influenced by three things – pensions, broadband pricing, and football."
Khalaf continued: "The company is currently in negotiations with trustees over how much it has to pay into the pension scheme, and low interest rates will help to inflate BT’s obligations. However rising costs may be mitigated by scaling back benefits for members, or by pledging certain assets to the pension scheme in exchange for smaller contributions.
"Meanwhile OFCOM is currently conducting a review of wholesale broadband pricing, and as a key player in this market BT stands to lose out if the regulator takes a tough stance. The government is keen to ensure the continued roll out of the fibre network to households across the country though, and will want to ensure that pricing remains attractive enough to keep the likes of BT investing in network infrastructure.
"Finally the triennial Premier League TV rights auction is upon us once again, and the eye-watering amounts of money paid for players reflects in part the gargantuan sums that BT and Sky plough into securing televised games for their sports channels. The fear is that Amazon and Facebook may throw their hats in the ring this time around, inflating the cost of rights beyond the £5bn Sky and BT forked out last time. A bigger spend wouldn’t be good for shareholders, or customers for that matter, though the footballers will be chuckling all the way to the bank."