BT sees proft drop, EC pension fund problem

The trouble continued for BT in the U.K. telco giant's fiscal third-quarter earnings report. Net income was down about 32 percent to $1.8 billion, and several reports suggested that BT still may record more earnings charges related to the poor performance of the company's Global Services unit. A Forbes story said that analysts believe that BT over-estimated the gains it thought it ultimately would realize from large, long-term global services contracts. The problem was caused both by sudden economic turbulence and by corporate inefficiency, the story says.

On top of that, BT found out yesterday that the European Commission has assigned the company to pay more than $23 million worth of contributions to a Pension Protection Fund, which protects employees of bankrupt companies. The U.K. government previously had allowed BT an exemption from paying contributions related to employees who worked for the company prior to 1984, when it was a state-owned telco. The European Commission said that exemption amounted to an unfair competitive advantage.

For more:
- Forbes has the earnings story
- Forbes has an Associated Press story about the pension issue

Related articles
BT last month estimated a $470 million charge on its global services unit
BT was looking at changes to its own pension plan late last year

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