BT share price slumps as revenue and profit decline

Patterson will be replaced this year.
BT’s (LON:BT.A) share price slumped on Thursday morning, after revenue and profit declined in the second quarter. 
Adjusted revenue fell 2% in the quarter but remained flat for the first half of the financial year. The most significant driver behind the waning revenue was the 10% decrease in Global Services revenue. Underlying revenue excluding transit, the group’s main indicator of revenue trends, also worsened, down 1.5% compared to last year.

The telecoms provider’s adjusted profit before tax tumbled markedly, down 10%. This figure came despite shrinking operating costs, as reduced payments to other telecoms operators and cost savings offset increased pension costs, business rates, sports programme rights and increased customer investment. This resulted in reported earnings per share (EPS) fell 7% to 5.3p, as adjusted EPS was 6.4p, down 11%, which beat analyst expectations of 6.16.

BT had also managed to wrestle down their huge pension scheme costs, down £300 million to £7.7 billion for the quarter. It had been reported yesterday that BT would close their defined benefit pension scheme, however today they confirmed they were still considering their options.

Deals for sports rights to the Premier League, Box Nation and a Cricket Australia have all added to operational costs also.

Gavin Patterson, chief executive of BT, commented on the results, saying “our first half results are in line with our expectations as encouraging results in our consumer facing lines of business, notably EE, helped offset ongoing challenges in our enterprise divisions, in particular Global Services”.

BT also confirmed that despite this being a “transitional year,” they have decided to hold their interim dividend at 4.85p per share. The ex-dividend date is 28 December 2017.

The share price for BT was down 1.5% to 257p at the time of writing.