BT today reported a mixed bag of results for its second quarter, with big investments in television cutting its overall profits.
Revenue remained stable for the three-month period, reaching just shy of £4.45bn, as it did in the previous quarter. However, despite a small rise from the first quarter, reported profits before tax were down by 10% from the same period in 2012, hitting £499m.
BT blamed the decline on its investment in BT Sport – its new TV channels trying to win customers from the company's biggest rival, Sky. Two million people have signed up to the service so far and the firm claims it will encourage users to sign up to its other offerings too – namely phone and broadband – but the process will be slow and continue to affect profitability.
As a result, BT Retail was the worst performing division, showing a 13% fall in profits for the quarter. However, the much maligned BT Global Services business achieved a 10% rise in profits, despite dropping 4% in revenues.
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BT’s internet services showed some growth with 168,000 new customers being added in the quarter – up from 150,000 in the second quarter of 2012. However, its fibre broadband performed incredibly well, with 316,000 additions, translating to a growth of 70% from last year. This reflected the reach of the network as BT continues to expand. The firm said the figure also included existing copper customers upgrading to the speedier services.
Gavin Patterson, BT’s new CEO since the departure of Ian Livingston in September, was pleased with the performance for his first quarter in charge.
“These are good results, with growth in earnings per share and free cash flow,” he said. “I feel privileged to be the new CEO of BT and am determined to build on the strong foundations that are already in place. These are exciting times for the company and we are determined to deliver our strategy with energy and discipline.”