BT rolls out strong first quarter update

Dividend yield remains strong as company stay on track.

Article updated: 2 August 2019 10:00am Author: Ian Forrest

  • 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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All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Ian Forrest portrait photo
Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.