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(Changes lede to focus on adjusted earnings, adds more information, share price)

 
   By Adria Calatayud 
 

BT Group PLC (BT.A.LN) on Friday backed its guidance for fiscal 2019 after first-quarter adjusted earnings rose ahead of expectations, driven by strong growth at the company's consumer division and cost savings.

The improved performance at the British telecommunications company, which in May unveiled plans to cut 13,000 jobs, comes as the business rolls out its fiber and 5G networks and looks for a new chief executive to replace Gavin Patterson, who will leave the post later this year.

Shares at 1000 GMT were up 3.5% at 232.75 pence, among the top gainers of the FTSE 100.

In the quarter ended June 30, adjusted earnings before interest, taxes, depreciation and amortization--the company's preferred profit measure, which strips out specific items--rose 0.8% to 1.80 billion pounds ($2.34 billion) from GBP1.79 billion the year before, BT said. The company attributed the higher adjusted Ebitda to stronger handset margins in its consumer business and to cost-savings related to its restructuring, which is on track.

Analysts expected BT to deliver a first-quarter adjusted Ebitda of GBP1.74 billion, according to a consensus estimate provided by the company.

Pretax profit for the quarter was GBP704 million compared with GBP418 million in the year-earlier period, prior to the adoption of new accounting standards, the company said.

First-quarter revenue fell 2.1% to GBP5.72 billion from GBP5.84 billion in the same period a year earlier, BT said. Analysts expected revenue of GBP5.71 billion, according to a company-provided consensus.

BT's consumer division--which accounts for nearly a half of the group's total revenue--saw revenue growth of 2% and was the only business unit to deliver an increase in the quarter. This rise was offset by 8% declines at both global services and wholesale segments and by a 2% fall at network-infrastructure arm Openreach.

"EE continues to maintain its network leadership and will switch on the U.K.'s first live 5G network trial in October," Mr. Patterson said.

The company said its outlook for the year ending March 31, 2019, remains unchanged. Last month, BT guided for adjusted Ebitda of between GBP7.3 billion and GBP7.4 billion and for underlying revenue to fall 2%, after the adoption of new accounting standard IFRS 15.

BT also maintained its capital-expenditure target at GBP3.7 billion, after the U.K. government outlined this week plans to boost fiber investment with the goal of achieving full coverage across the country by 2033.

Write to Adria Calatayud at adria.calatayudvaello@dowjones.com

(END) Dow Jones Newswires

July 27, 2018 06:43 ET (10:43 GMT)

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