BT profits rise beats expectations
BT profits have beaten expectations, thanks to strong growth in both broadband and its BT Vision television service.
Pre-tax profits at the telecoms giant rose 13% to £496m in the three months to the end of September, compared with the same period last year.
BT said its full-year earnings were likely to be slightly above the £5.6bn previously expected.
The raised forecast sent the shares up 6% - the biggest rise on the FTSE 100.
The number of customers using BT's broadband network increased by 33% in the quarter to 253,000.
On the downside, fewer customers signed up for its traditional landline services.
Revenue at its Global Services division, which provides managed networked IT services for business and government organisations, fell by 2% because of a fall in fixed-line calls.
The group's broadband television service BT Vision added 24,000 customers, bringing the total to 520,000.
Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers, said BT was performing well: "The broadband roll out continues apace, Global Services has shown a marked improvement, the free cash-flow position looks likely to be significantly ahead of plan and the BT Vision service is also growing at an impressive clip.
"Set against this, BT operates in a number of markets which are notoriously competitive, whilst intense pressure on its fixed line offering remains."
The company's chief executive, Ian Livingston, said: "We have made significant progress in improving profitability and cash flow, enabling us to invest in building the foundations for revenue growth in 2012-13."
BT said earlier this month that £2.9bn would be knocked off its pension scheme's deficit because of a shift in the measure of inflation used in pension calculations.
The deficit will be cut by using the Consumer Prices Index to uprate payments and should reduce it from £7.9bn to £5.2bn.