BT reports better-than expected first-half earnings, nudges up outlook

BT reports better-than expected first-half earnings, nudges up outlook
British Telecom (BT)'s headquarters is seen in central London, Britain May 10, 2018. REUTERS/Hannah McKay -
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LONDON (Reuters) - British broadband company BT reported a better-than-expected 2 percent rise in first-half earnings and nudged its guidance for the full year higher, as outgoing Chief executive Gavin Patterson said the group's recovery plan was delivering.

BT, the market leader in both broadband and mobile, said the rise in profit was mainly driven by more sales of high-end smartphones and cost savings across the business.

The group posted adjusted core earnings of 3.68 billion pounds ($4.74 billion) and said it expected earnings for the year to be at the upper end of its 7.3-7.4 billion pound range.

Adjusted revenue slipped 1 percent to 11.62 billion pounds as regulated price reductions in its broadband network, which serves other operators as well as BT, and declines in its enterprise businesses offset growth in consumer.

Patterson, who will be replaced by Philip Jansen on Feb.1, said the group was improving customer service, accelerating the roll-out of full-fibre networks and making progress towards transforming its operating model.

"Despite increasingly competitive fixed, mobile and networking markets and continued declines in legacy products there is no change in our overall outlook for the full year," he said, adding that based on current trading the company expected earnings to be in the upper half of its range.

BT said BT Plus, its first high-end converged consumer product, now had around half a million subscribers, up from more than 100,000 at the end of June.

Monthly churn in both its fixed and mobile customer bases ticked up to 1.6 percent and 1.2 percent respectively.

(Reporting by Paul Sandle; editing by Sarah Young)

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