SHARES in BT slumped yesterday as the extent of the telecoms operator’s European woes were laid bare, with the firm announcing a six per cent drop in revenues.
BT’s lossmaking global services arm, which provides phone and internet services to multinational corporations and governments, saw contracts dry up in the three months to July, with sales falling nine per cent.
The news rocked investors, sending shares down nearly seven per cent in early trading, the biggest drop in almost a year.
The firm’s chief executive Ian Livingston said BT was focused on cutting costs in the global services division, telling shareholders that relying on “a sudden upturn in European markets” would be “unrealistic”.
Despite revenue falling to £4.5bn, BT managed to increase profits, as the firm’s deep cost-cutting operation paid off.
Profit before tax rose 13 per cent year-on-year to £584m following a fall in operating costs, and BT said it expected the decline in revenue to slow down in the next quarter.
The global services division has troubled BT for several years, even forcing the company into a £2bn loss in 2008.
BT also said earnings will be hit next year by a £738m investment in Premier League football rights for its BT Vision TV service.