BT has reported a slight dip in earnings for the past three months, despite ongoing cost-cutting measures. Shares edged lower in early trading on Thursday, even as executives hailed a "solid start" to the financial year.
Financial performance
The telecoms giant told shareholders that adjusted earnings fell by 1% to £2.01 billion for the quarter ending June 30, compared with the same period a year earlier. Pre-tax profits slipped by 4% to £505 million, impacted by higher finance costs, though this was partly offset by lower restructuring costs.
Revenues remained flat at £4.3 billion for the quarter, with a 1% decline in adjusted UK service revenue. The company, led by Allison Kirkby since 2024, continues to cut costs and invest in fibre broadband to drive growth.
Fibre broadband growth and challenges
BT said it was boosted by growth in its fibre business, with Openreach fibre-to-the-premises adding 574,000 customers in the quarter. However, Openreach broadband lines decreased by 192,000, with losses on track to reach 800,000 for the year.
Ms Kirkby said: "No-one is upgrading and investing in the country's digital backbone at the scale and pace that BT is. We remain on track to deliver our targets, including cash flow of around £2 billion this year and £3 billion by the end of the decade – as we create a better BT, for all of us."
Analyst reaction
Duncan Ferris, analyst at Freetrade, said: "BT's expansion of its fibre network means better monetisation of a network it spent years building. It means providers can sell faster and more expensive packages to customers, generating recurring wholesale income. In short, the greater the uptake, the better BT's return on investment. But the company's financials reflect that work is still in progress."
BT shares were down 0.5% on Thursday.
