BT raises forecast after profits beat expectations

By DAILY MAIL REPORTER
Updated: 06:27 EST, 11 November 2010

Shares in BT rose 3.5 per cent in morning trading on Thursday after the telecoms giant lifted its forecast for the year.

In the three months to September 30, underlying pre-tax profits in the company rose 13 per cent to £496million.

The market-beating performance allowed BT to raise its forecast for full-year earnings from a previously expected £5.6billion to £5.8billion.

Growth expectations: Boss Ian Livingston expects BT Infinity to lift sales

The company said the number of customers using its network in the period rose to 253,000. Its broadband television service BT Vision added 24,000 customers, an increase of a third.

However, group revenues declined by 3 per cent to £4.98billion, hit by slower call and landline sales amid a competitive environment. 

Chief executive Ian Livingston said the roll out of BT Infinity, the firm’s high speed fibre-based broadband, would help to boost sales. Currently, it has 38,000 customers, rising by some 4,000 per week.

BT, which returned to profit earlier in 2010 after a cost-cutting drive, increased line rental and raised the cost of day time calls in September, but said both are still cheaper than its main competitor, Virgin.

Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said BT has started performing well in several areas, including broadband roll-out and in Global Services.

He warned, however, that the company ‘operates in a number of markets which are notoriously competitive, whilst intense pressure on its fixed line offering remains’.