BT (NYSE: BT) beat out analyst estimates in its fiscal second quarter results as it saw increases in both broadband service subscribers and global services unit.
For the quarter, BT reported that revenue declined 2 percent to £4.89 billion ($7.84 billion), while core earnings rose 3 percent to £1.5 billion ($2.40 billion).
Despite lower overall sales, BT's results were helped by ongoing cost cutting, a process that drove up its core earnings 3 percent through September and free cash flow up 16 percent.
The service provider said that its cost cutting program enabled it to move up the timeline of its ambitious UK Fiber to the X network plans in addition to expanding its network presence in Latin America to target new multinational corporation (MNC) deals.
"It's another quarter of progress," said Ian Livingston, CEO of BT. "In terms of our overall expectations, probably some analysts will edge up their profit and cash flow numbers and people can feel even more confident about our numbers as a result of this quarter."
Similar to other recent quarters, broadband continued to be the star performer in its portfolio.
During the quarter, BT Retail added 166,000 new subscribers. Out of that figure about 88,000 customers signed up for its Fiber to the Cabinet (FTTC)-based broadband product, ending the quarter with over 300,000 customers.
While it has been touting the higher speed FTTC service, BT continues to see gains in selling its copper-based DSL service to its own retail customers and wholesale customers via its Openreach division. Over the past six months, the incumbent carrier signed up a total of 514,000 new customers on its own DSL and the LLU network it provides for its wholesale service provider customers like Talk Talk (LSE: TALK).
Also contributing to the revenue mix was its once troubled Global Services division, rising 15 percent.
As for future guidance, Livingston said it is "not changing our overall guidance at this point" because he thinks that "it's still a little bit early in the year."
For more:
- see the earnings release
- Reuters has this article
Earnings summary: Wireline in the third quarter 2011
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