BT's first-quarter revenue and earnings fall 7% on COVID-19 impact

FILE PHOTO: BT Tower owned by British Telecom is pictured in London, Britain, November 15, 2019. REUTERS/Simon Dawson

LONDON (Reuters) - BT BT.L, Britain's biggest broadband and mobile operator, reported a 7% drop in both revenue and core earnings in its first quarter after the COVID-19 pandemic impacted its BT Sport television revenue and reduced demand from business customers.

Chief Executive Philip Jansen said BT delivered a strong operating performance in the quarter, when millions relied on its networks for home working and schooling, and produced “relatively resilient” financial results.

He said the company, which pulled its dividend in May to help weather the unfolding health crisis, had enough visibility to provide guidance for the year.

“Despite our strong operational performance in the first three months of the year, it is clear that Covid-19 will continue to impact our business as the full economic consequences unfold,” he said.

BT said it now expected to produce adjusted core earnings of between 7.2 billion pounds and 7.5 billion pounds on 5-6% lower revenue for its 2020/21 financial year.

The outlook steers towards the lower end of analysts’ expectations. They had on average expected core earnings for the year of about 7.5 billion pounds on revenue down 5.6%, according to a company-compiled consensus.

Reporting by Paul Sandle; editing by Kate Holton