BT says Q1 profit up 33 percent
The Associated Press

LONDON
Thu, 29 Jul 2010 14:10 UTC

Communications company BT Group PLC said Thursday its first quarter profit rose 33 percent as cost-cutting measures helped offset a 4 percent drop in revenue.

Net profit was 284 million pounds ($444 million) in the three months ending June 30, compared to 214 million pounds a year earlier, the company said. Revenue was 2.007 billion pounds.

BT said it had trimmed operating costs by 6 percent. Labor expenses were reduced by 8 percent, with severance costs running at 10 million pounds.

Capital expenditure was down 21 percent to 103 million pounds.

The results were slightly ahead of expectations. BT shares were up 2.6 percent at 143.5 pence in late morning trading on the London Stock Exchange.

"While the result shows an improvement in trading, and cost cutting guidance of 900 million pounds for the year looks on track, we remain concerned with the group's exposure to decreases in public spending," said Jonathan Jackson, head of equities at Killik & Co. in London.

"The continued decrease in revenues may also lead to negative effects on margins in order to reverse the trend," he added.