BT's (NYSE: BT) continual cost cutting measures and ongoing wireline broadband deployment efforts enabled the UK incumbent provider to increase its Q3 earnings by 7 percent.
During the third quarter, BT reported that it had reduced operating costs by $384 million, or 5 percent, to $7.09 billion. At the same time, earnings before interest, taxes, depreciation, amortization (EBITDA) and costs from ongoing staff reductions climbed to $2.4 billion in the three months through December.
Ian Livingston, CEO of BT said in a statement that "These results show that we are making progress on a number of fronts," adding that "there is always more to do but our performance underpins our outlook for this year and the period to 2012/13."
Cost cutting was not the only factor that contributed to BT's third-quarter earnings rise. What also helped drive its Q3 earnings increase were gains in its consumer broadband and even its once-struggling Global Services arm.
BT Global Services increased its EBITDA margin to 7.1 percent from 5.8 percent in Q3 2009. The service provider said that the unit will become cash flow positive in the current financial year. Livingston said that "BT Global Services is now expected to be cash flow positive this year, a year earlier than targeted."
Broadband subscribership was also up in Q3. BT added 188,000 new broadband subscribers in Q3--the largest increase it has seen in eight years. Meanwhile, it also signed up 40,000 new customers for its IPTV service, BT Vision, which was the highest rate it has seen in seven quarters. The service provider is currently building out a nationwide Fiber to the X (FTTX) network that will serve an estimated two-thirds of UK homes by 2015.
"BT Retail had a good quarter with growth in business revenues and our highest share of DSL broadband net additions for eight years, while Openreach benefited from a stronger broadband market and growth in its copper line base," Livingston said.
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