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BT pleases investors with positive Q3 results
As BT report encouraging Q3 results Sheridan Admans, investment research manager at The Share Centre explains what they mean for investors.
“Telecoms giant BT announced positive Q3 results that delivered good cash flow generation and profit growth. However, as revenues were down by around 5%, profit growth was mainly driven by cost savings. We are slightly concerned about this longer term and would like to see it supported by revenue growth.
“BT has been getting its house in order and investors will be pleased to see it has been winning new contracts worldwide, with orders this year up by 50% in Asia-Pacific and Latin America. The company is also rolling out its fibre broadband network in an effort to attract new customers. The company hopes to cover two thirds of the UK by 2014, a year earlier than planned. We expect to see this drive revenue growth.
“On a slightly negative note, BT’s pension deficit saw a large increase in liabilities which may drag valuation down. This was partly due to low real yield on corporate bonds, as a result of the impact of quantitative easing and inflation being higher than longer term assumptions.
“BT’s global diversity of operations remains attractive for investors. We continue to recommend BT as a ‘buy’ based on its strategic plan, set in motion in 2012, to enhance services and helping to offset declines in fixed line calls.”
THIS DATA IS PROVIDED BY THE SHARE CENTRE. THIS IS NOT INTENDED TO CONSTITUTE AN OFFER OR AGREEMENT TO BUY OR SELL INVESTMENTS.
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Back2012-02-03 11:53:03 © Moneyextra.com