Dividend yield remains strong as company stay on track.
BT rolls out strong first quarter update
- Latest update beats market expectations and group remains on track to meet full year targets.
- 3% drop in shares drop in early trading can be attributed to the weak market background.
- With dividend yield remaining strong, we continue to recommend these shares as a ‘Hold’
This morning’s update showed a 1% drop in revenue to £5.6bn and a similar size of decline in earnings to £1.96bn. Both figures were better than expected and the company said it remained on track to meet its targets for the full year. The company launched its first 5G services during the quarter and welcomed the Government’s statement on wanting to see full fibre broadband available right across the country. The consumer, global and enterprise divisions all saw a decline in revenue but Openreach recorded a modest 1% increase.
The shares dropped 3% in early trading in response to the news, but much of that is due to the weak market background. There’s no doubt this is a reassuring update given the confident reiteration of full-year expectations. There was no mention of the dividend today and there are clearly still challenges for the new CEO to work on but the dividend yield is very good so the shares remain a ‘hold’ for medium risk investors seeking income.
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