BT Expects Weaker Fiscal Year 2021 Adjusted Earnings Despite 1Q Beat -- Update
31 Luglio 2020 - 1:33PM
Dow Jones News
--BT beat forecasts for the first quarter as the impact of the
pandemic was less severe than expected
--The U.K. telecommunications company gave guidance for fiscal
2021 for the first time, with a weaker-than-expected earnings
outlook
--BT warned the economic fallout from the pandemic will continue
to hurt its enterprise unit
By Adria Calatayud
BT Group PLC said Friday that revenue and adjusted earnings for
the first quarter of fiscal 2021 both fell but by less than
expected, as it issued full-year earnings guidance that at its
mid-point range sits below consensus forecasts.
The U.K. telecommunications company said revenue for the quarter
ended June 30 was hurt by the coronavirus pandemic, following other
operators that have struggled to capitalize on increased reliance
on their service during lockdowns.
BT attributed the decline to lower revenue from BT Sport,
following widespread cancellation of live sporting events, and a
reduction in business activity in its enterprise unit. BT
Enterprise--which accounted for a quarter of the group's total
revenue for the quarter--was the weak spot in the quarter, as both
revenue and adjusted earnings before interest, taxes, depreciation
and amortization at the unit fell short of analysts'
expectations.
BT warned of a further impact from the pandemic on its
enterprise unit in future quarters as a result of business
insolvency, slower decision-making by larger customers, and lower
usage across its small-and-medium enterprises and wholesale
segments.
For the year ending March 31, 2021, BT said it expects adjusted
Ebitda--the company's preferred metric, which strips out
exceptional and other one-off items--to be between 7.2 billion and
7.5 billion pounds ($9.30 billion-$9.82 billion). Adjusted revenue
for the year is expected to fall between 5% and 6%, the company
said. Last year, the company's adjusted Ebitda was GBP7.91 billion
on revenue of GBP22.82 billion.
Analysts expect BT to report adjusted Ebitda of GBP7.50 billion
on revenue of GBP21.55 billion for fiscal 2021, according to a
consensus provided by the company ahead of its results.
Shares at 1042 GMT were down 2.9% at 104.70 pence.
BT made a first-quarter pretax profit of GBP561 million compared
with GBP642 million for the year-earlier period.
BT's adjusted Ebitda fell 7.4% to GBP1.81 billion, against
expectations of GBP1.75 billion, according to company-provided
consensus estimates.
Quarterly revenue fell to GBP5.25 billion from GBP5.63 billion,
exceeding consensus expectations of GBP5.16 billion, the company
said.
BT said consumer revenue was hit by the pandemic, although the
unit's quarterly results were ahead of consensus. The company said
the unit continues to suffer the consequences of the coronavirus
crisis, mainly through lower roaming and pay-as-you-go revenue,
sport revenue from pubs and clubs, and more price-conscious
customers.
"Despite our strong operational performance in the first three
months of the year, it is clear that Covid-19 will continue to
impact our business as the full economic consequences unfold,"
Chief Executive Philip Jansen said.
However, BT expects a return to adjusted earnings growth beyond
this year, Mr. Jansen said.
Write to Adria Calatayud at adria.calatayud@dowjones.com
(END) Dow Jones Newswires
July 31, 2020 07:18 ET (11:18 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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