--BT beat forecasts for the first quarter as the impact of the pandemic was less severe than expected
--The U.K. telecommunications company gave guidance for fiscal 2021 for the first time, with a weaker-than-expected earnings outlook
--BT warned the economic fallout from the pandemic will continue to hurt its enterprise unit
By Adria Calatayud
BT Group PLC said Friday that revenue and adjusted earnings for the first quarter of fiscal 2021 both fell but by less than expected, as it issued full-year earnings guidance that at its mid-point range sits below consensus forecasts.
The U.K. telecommunications company said revenue for the quarter ended June 30 was hurt by the coronavirus pandemic, following other operators that have struggled to capitalize on increased reliance on their service during lockdowns.
BT attributed the decline to lower revenue from BT Sport, following widespread cancellation of live sporting events, and a reduction in business activity in its enterprise unit. BT Enterprise--which accounted for a quarter of the group's total revenue for the quarter--was the weak spot in the quarter, as both revenue and adjusted earnings before interest, taxes, depreciation and amortization at the unit fell short of analysts' expectations.
BT warned of a further impact from the pandemic on its enterprise unit in future quarters as a result of business insolvency, slower decision-making by larger customers, and lower usage across its small-and-medium enterprises and wholesale segments.
For the year ending March 31, 2021, BT said it expects adjusted Ebitda--the company's preferred metric, which strips out exceptional and other one-off items--to be between 7.2 billion and 7.5 billion pounds ($9.30 billion-$9.82 billion). Adjusted revenue for the year is expected to fall between 5% and 6%, the company said. Last year, the company's adjusted Ebitda was GBP7.91 billion on revenue of GBP22.82 billion.
Analysts expect BT to report adjusted Ebitda of GBP7.50 billion on revenue of GBP21.55 billion for fiscal 2021, according to a consensus provided by the company ahead of its results.
Shares at 1042 GMT were down 2.9% at 104.70 pence.
BT made a first-quarter pretax profit of GBP561 million compared with GBP642 million for the year-earlier period.
BT's adjusted Ebitda fell 7.4% to GBP1.81 billion, against expectations of GBP1.75 billion, according to company-provided consensus estimates.
Quarterly revenue fell to GBP5.25 billion from GBP5.63 billion, exceeding consensus expectations of GBP5.16 billion, the company said.
BT said consumer revenue was hit by the pandemic, although the unit's quarterly results were ahead of consensus. The company said the unit continues to suffer the consequences of the coronavirus crisis, mainly through lower roaming and pay-as-you-go revenue, sport revenue from pubs and clubs, and more price-conscious customers.
"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," Chief Executive Philip Jansen said.
However, BT expects a return to adjusted earnings growth beyond this year, Mr. Jansen said.
Write to Adria Calatayud at firstname.lastname@example.org