BT share price: Investors eye telco’s results next week

BT Group (LON:BT.A) is expected to post a drop in profits when it updates investors on its performance next week. The results will come amid reports that the former telecoms monopoly is mulling over bids for its Irish business as it looks to  prune its Global Services division in the wake of the accounting scandal at its Italian business.

BT’s share price has climbed higher in London in today’s session, having gained 0.40 percent to 226.65p as of 14:32 BST. The stock is marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.87 percent higher at 7,415.15 points. The group’s shares have lost more than two percent of their value over the past year, as compared with about a 1.2-percent dip in the Footsie.

BT to post FY results

BT is scheduled to update investors on its full-year performance on Thursday and Proactive Investors reports that the City is expecting the fourth quarter to have seen the telco’s EBITDA tumble nine percent to £1.86 billion as underlying revenues decline 2.8 percent to £5.78 billion, giving an estimated full-year top line of £23.38 billion, with £7.41 billion of EBITDA and adjusted earnings per share of 26.6p.

Proactive Investors further quoted UBS analysts as saying that  the results will potentially be significant as the telco’s new CEO Philip Jansen “will give a strategy update that could results in more upfront investment for the group/higher capex at Openreach in return for higher longer-term profits”.

Chris Beauchamp at IG meanwhile commented in a note this week that until the earnings decline trend “has been reversed and the firm starts to see a rise in income, the focus will be on cost-cutting and holding the line on expenditure rather than focusing on growth and ways of gaining market share”.

Analyst ratings update

UBS reaffirmed the telco as a ‘neutral,’ without specifying a target on the BT share price today, while earlier in the week, Numis reaffirmed the company as a ‘buy’. According to MarketBeat, the former telecoms monopoly currently has a consensus ‘hold’ rating and an average valuation of 7,415.15p.