BT's (NYSE: BT) focus on reducing costs and growing its broadband base put the UK incumbent provider on steady ground in its fiscal fourth quarter of 2011.
For Q4, the service provider reported that earnings--before interest, tax, depreciation and amortization (EBITDA)-- rose 3 percent.
As seen in previous quarters, BT's cost-cutting initiatives gave earnings a boost as revenue dropped to £19 million ($30.6 million), a factor it relates to a cut in transit service rates. It also continues to see slow spending throughout Europe and in the small to medium enterprise (SME) market.
Once again, the star in BT's portfolio was broadband. During Q4, it added over 136,000 retail broadband customers, a figure that represents 44 percent of the DSL, Local Loop Unbundling (LLU) and fiber-based broadband market net additions.
Of particular note was its fiber-based BT Infinity service. It added 131,000 new subscribers during the quarter, bringing its total to over 550,000 subscribers.
Likewise, the service provider reported continued progress with its BT Vision IPTV service. It added 28,000 customers in the quarter, bringing its total IPTV customer base to over 700,000.
Meanwhile, business revenues declined 6 percent during the quarter due to lower IT hardware sales and a decision to move away from low-margin IT hardware trade sales.
Despite the challenges it faced in Q4, BT forecasted that underlying revenue excluding transit will show an improving trend in 2013 and 2014.
"While we will be impacted by economic and regulatory headwinds, we expect to continue to grow profits over the next two years, with normalised free cash flow growing to above £2.4billion ($3.87 billion) in 2014," BT CEO Ian Livingston said in the earnings release.
Shares of BT were trading at $32.95, down 0.53, or 1.58 percent, in morning trading today on the Nasdaq.
For more:
- see the earnings release
- Reuters has this article
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