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Revenues down at BT for Q1, share price up

It sucks to be us, but it really sucks to not be us

BT reported a 5 per cent decline in revenues for its first quarter ended 30 June, while pre-tax profit climbed 20 per cent.

It saw total sales of £4.76bn in Q1, compared with £5bn in the same period in 2010. Adjusted profit before tax jumped to £533m from £466m a year earlier.

Earnings per share rose from 4.4 pence to 5.2 pence and earnings before interest, taxes, depreciation, amortisation were up 3 per cent at BT, with the company reporting £1.44bn for the quarter.

The UK's largest telco attributed some of the blame for the revenues fall on a 6 per cent drop in customer revenue for its retail division, where biz sales were flat for the quarter. It pulled in retail sales of £1.8bn for the period.

Similarly, BT's wholesale unit suffered a 5 per cent dent in revenue. The company singled out "regulatory decisions" for hampering sales in that wing of the firm's business, which racked up £1bn during the quarter.

And despite scoring several lucrative contracts abroad – including a huge managed services network deal in Latin America – in its Q1 period, BT watched its global services revenue slide 5 per cent to £1.9bn for the three months to the end of June this year.

On retail, BT said it netted an extra 141,000 broadband customers during the quarter. It grabbed 71,000 sign-ups to the company's faster broadband product dubbed Infinity.

It currently boasts a broadband customer base of 5.8 million compared with its nearest rival Virgin Media, which has 4.78 million punters on its books.

Just last week Ofcom ordered BT to slash its wholesale prices by 12 per cent below inflation per year for its broadband network, when the company played down the regulatory cap as "non-material".

But today's results tell a slightly different story, with BT partly blaming weakened sales in the wholesale division on the communications watchdog's decision to force it to offer a reduced price tag.

The overall revenues pinch in BT's results follow a 6 per cent fall in sales in the telecom giant's Q4 results for the period ended 31 March.

However, shares on the London Stock Exchange remained brisk, with trading in BT currently up nearly 2.4 per cent at 195.2 pence this morning. ®

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