Britain's BT Group posted better-than-expected third-quarter earnings today on revenues that grew for the fourth straight quarter, but concerns about its core business held back its shares.
Revenues were boosted by a 35 per cent rise in "new wave" revenues from broadband Internet and IT and networking services, areas BT is increasingly reliant on to counter declining call revenues.
But these typically carry lower margins than its traditional businesses, which still account for about three-quarters of group sales and where headline revenues fell 8 per cent during the quarter to December 31st, hobbled by rising competition from aggressive new players and falling prices.
BT's earnings per share before goodwill amortisation and exceptional items rose 9 per cent to 4.8 pence, and the former telephone monopoly said underlying revenues rose 3 per cent to £4.584 billion ($8.54 billion).
"BT's results show that revenue growth has continued, and concerns over continually diminishing revenues that some feared should now finally be overcome. However, the focus is now likely to turn to profitability," said Nomura analyst Mr Chris Alliott.
BT's share of the consumer market fell 1.3 percentage points from the preceding quarter to around 63 per cent, while its business market share declined by 0.5 percentage point to around 42 per cent.