CEO remains ‘excited’ despite discouraging outcome
BT fails to spark excitement with latest results
- Telecoms giant post disappointing results for the third quarter, as it reported a 3% decline in revenue and a 4% fall in core earnings
- Following yesterday Huawei announcement, group states it is now reviewing the impact of this decision on its guidance and their initial thought is that it will cost it £500mn over the next five years
- Shares fall by over 7% in early trading following disappointing third quarter results
- Despite all of this, BT remains on track to meet its expectations for the year
- Recommendation: With a number of clouds on the horizon, we maintain our ‘Hold’ recommendation for investors willing to accept a medium level of risk
BT shares, which have been a constant underperformer over the past 5 years, are down by over 7% in early morning trading on the back of a third quarter trading update.
The group have stated that, as a result of the recent government decision to give Huawei a role in the UK’s 5g network, they are now reviewing the impact of this decision on group guidance. Their initial thought is that it will cost it £500 million over the next five years. This is due to the company now having to increase its range of supplier in the future.
Group performance over the third quarter was a little below expectations and adjusted earnings at £1.98 billion also came in slightly below analyst expectations. Even so, BT remains on track to meet its expectations for the year.
Despite the CEO being ‘really excited about the long-term prospects’, there are still clearly challenges for the CEO to work on in order for his plans to make BT ‘bolder, smarter and faster’.
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