BT share price rallies as earnings beat estimates after EE takeover
Shares in BT Group (LON:BT.A) have jumped in today’s session after the telco’s profits surpassed expectations, boosted by the company’s recent acquisition of mobile operator EE. The FTSE 100 group, whose Openreach division is under increased scrutiny, separately announced plans to invest £6 billion to upgrade its broadband and mobile network.
As of 09:13 BST, BT’s share price had added 3.30 percent to 454.00p, outperforming the FTSE 100 index which currently stands 0.34 percent higher at 6,132.60 points. The telco’s shares have gained a little over one percent over the past year, but are down nearly four percent in the year-to-date.
BT announced in a statement this morning that its fourth-quarter revenue had jumped 22 percent to £5.66 billion, while its quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA) came in 14 percent higher at £2.08 billion, surpassing Bloomberg’s average estimate of £1.93 billion. The period includes two months of results from EE which BT acquired at the end of January. The telco’s full-year revenue meanwhile climbed six percent to £18.91 billion, while full-year EBITDA rose five percent to £6.58 billion.
“This has been a landmark year for BT,” the group’s chief executive Gavin Patterson said in the statement, adding that EE’s integration was progressing well, and the FTSE 100 group now saw “the opportunity to deliver more synergies than we originally expected, and at a lower cost”.
BT announced in a separate statement that its Openreach and EE businesses will spend around £6 billion over the next three years in the first phase of a plan to extend superfast broadband and 4G coverage beyond 95 percent of the country by the end of the decade.
The commitment comes after industry regulator Ofcom recently stopped short of recommending the break-up of the former telecoms monopoly, but demanded an overhaul of Openreach. BT’s chief executive cautioned today that the telco’s investment was “subject to regulatory certainty”.
As of 09:37 BST, Thursday, 05 May, BT Group plc share price is 453.95p.