BT reiterates revenue forecasts, analysts positive

Telecommunications outfit BT Group on Friday released interims which showed third quarter operating profits coming in slightly ahead of expectations, alongside 'in line' revenue figures. In a similar vein, the company reiterated its sales guidance for the full year. More importantly however, the firm has launched a restructuring of its global services unit, which may help to drive EBITA upgrades and eventually, possibly, increased dividend payments, some analysts believeThe update, which provided third-quarter results alongside the nine-month period to December 31st, showed mixed results. Revenue in the third quarter slid 6.0% to £4,510m, as expected by analysts, and underlying revenue excluding transit for the quarter was down 3.0%.On the other hand, earnings before interest, tax, depreciation and amortisation (EBITDA) - a widely used measure of a company´s operating performance- rose 2.0% in the quarter to £1,548m and 1.0% to £4,508m over the nine months, coming in slightly ahead of consensus estimates.However, there were differences between the adjusted and reported results on a number of measures. Adjusted earnings per share were up 8.0% over the quarter to 6.6p compared to the reported earnings per share which declined by 2.0% over the same period.Likewise, adjusted pre-tax profit rose 7.0% to £675m while reported pre-tax profit contracted by 4.0%.Revenue fell seven per cent to 13,468m pounds in the nine months to December 31stCapital expenditure over both the quarter to December 31st and the nine months to December 31st both fell, by 14% and 6.0% respectively.Ian Livingston, Chief Executive Officer of BT Group, commented: "We have made progress in a number of areas and delivered solid financial results. These are in line with our expectations for the year, which remain unchanged."He added: "More than 13 million premises can access our fibre broadband and we are passing around 100,000 additional premises every week. Take-up is growing strongly with around 1.25 million homes and businesses now enjoying the benefits of faster speeds. "This gives us an excellent platform for our push into TV and Sport later this year. Our pre-season training is going well. We have secured attractive new content and world class production facilities at the Olympic Park and are building a strong team."BT reiterated that it expects revenue to improve in the second half through March, when compared with the first half. Divi increase possible some analysts sayCommenting on the outfit´s results analysts at Jefferies had this to say: "We believe BT has built contingency into EBITDA guidance, as part of its restructuring plans, where fiscal year 2014 implies an abrupt fade in the pace of cost reduction. We see material upside if BT continues to weather macro headwinds and begins to deliver on GS cost reductions. "Moody's raised the outlook on BT's senior unsecured debt from stable to positive last September. It suggested that an upgrade to Baa1 (from Baa2) could follow if adj. net debt-to-EBITDA falls sustainably sub-2.5x. We expect adj net debt-to-EBITDA to fall from 2.4x at Mar12 to 2.1x by Mar13e and 1.7x by Mar 15e. We expect dividend policy to be revised up following any credit rating upgrade."RF