BT posts 6% rise in Q1 core earnings

British telecoms provider BT posted a 6% rise in first-quarter adjusted core earnings, generated strong cash flow and reiterated its outlook after taking further costs out of the business.
Britain's biggest fixed-line telecoms provider said its group revenues were down 4% to 5 bln pounds, in line with forecasts, while core earnings were up 6% to 1.4 bln pounds, slightly ahead of expectations.
It took 291 mln pounds of operating costs out of the business, helping it to report a free cash flow figure of 415 mln pounds, compared with an outflow of 122 mln pounds a year ago.
BT has been plagued by underperformance at its Global Services unit, which caused two profit warnings at the group, but it has started to turn the company around after cutting costs. Its total labour costs were down 8% on last year. Its pension funding deficit valuation, another cause for concern for investors, was put at 6.6 bln pounds at the end of March, compared with an earlier valuation of 9 bln pounds from the end of 2008.