BT Group Earnings Meet Estimates 

(Bloomberg) -- BT Group Plc’s second quarter profits met estimates on the back of stronger than expected performance in its consumer division, in a sign that Chief Executive Officer Philip Jansen is weathering intensifying competition for U.K. broadband customers.

• BT said adjusted earnings before interest, tax, depreciation and amortization fell 5% to 1.97 billion pounds ($2.6 billion), meeting the average of analyst estimates compiled by the company. The company maintained its guidance and dividend.

Key Insights

• Investors may welcome the absence of nasty surprises, as analysts have been monitoring for a potential dividend cut while the company comes under pressure to spend more to build out its fiber network.
• Jansen, who took the top job in February, has introduced new products, launched 5G services, given employees shares and boosted fiber-optic building commitments in a bid to win over staff, government and customers.
• BT is defending its market share against broadband challengers funded by investors such as KKR and Goldman Sachs and rival wireless carriers trying to undercut it on price.
• Uncertainties remain, including rules determining returns on fiber investment expected from communications regulator Ofcom, Huawei Technologies Co.’s role in wireless networks and an imminent auction for expensive Champion’s League soccer rights.

Market Reaction

• The stock fell 1.2% at 8:09 a.m. in London, while the FTSE 100 index dropped 0.4%
• The shares have lost more than half their value since 2016, battered by Brexit, an accounting scandal in Italy, and a gloomy sector outlook - though signs of political progress in Britain have helped buoy the stock in the last month.

Get More

• See the numbers here
• Company statement

To contact the reporter on this story: Thomas Seal in London at tseal@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Jennifer Ryan

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