BT Profit Beat and Regulatory Reset Smooth Path for Next CEO

BT Group offered investors some respite from a string of bad surprises as Britain’s former phone monopoly searches for a new CEO, reporting quarterly results that beat expectations, according to Bloomberg.

BT shares were on track for their first earnings-day gain in six quarters after the company reported growth in its consumer business and outgoing CEO Gavin Patterson sought to draw a line under his tense relationship with industry regulators.

BT’s fiscal first-quarter adjusted earnings before interest, taxes, depreciation and amortization rose 1 percent to 1.8 billion pounds ($2.36 billion), beating the 1.73 billion pound average of five estimates compiled by Bloomberg. Adjusted sales fell 2 percent to 5.72 billion pounds, roughly in line with expectations.

The results could be the last under Patterson, whose removal was announced in June just four weeks after he unveiled a revamped strategy that included 13,000 job cuts but no meaningful profit growth for three years. BT shares were down 17 percent year to date, through Thursday.

As the chief custodian of Britain’s telecom infrastructure, his successor will need to balance the demands of shareholders with government pressure to boost spending on full-fiber lines. The government this week published a telecom infrastructure review and BT got on board with an offer of discounts for rival communication providers.

The company has been cutting the prices it charges rivals to access its broadband network. That was offset by growth on the consumer side, as BT raised tariffs and introduced new bundled services. Some analysts voiced caution on the numbers, which also showed a fall in adjusted revenue in the wholesale business and at BT’s struggling global services arm.