BT Group (LON:BT.A) Announces Earnings Results

BT Group (LON:BT.A) posted its quarterly earnings results on Thursday. The communications services company reported GBX 9.70 earnings per share for the quarter, Digital Look Earnings reports. The firm had revenue of GBX 875.30 billion for the quarter. BT Group had a net margin of 4.11% and a return on equity of 6.33%.

Here are the key takeaways from BT Group’s conference call:

• BT reported 1% growth in first-half revenue and EBITDA and reiterated its guidance, including around £2 billion of normalized free cash flow in FY2027 and £3 billion by FY2030. First-half normalized free cash flow was £236 million, however, reflecting timing-related headwinds that management expects to ease.
• Openreach connected its 10 millionth full-fibre customer and passed more than 24 million premises, with connections setting a record and broadband line losses 11% lower year over year. Openreach EBITDA rose 4%, supported by growth and lower costs.
• Transformation delivered £312 million of annualized gross savings in the half and £1.7 billion cumulatively, alongside an 11% reduction in total labor resource. BT also migrated 1.1 million customers from the legacy PSTN network, with about 1 million remaining before the January 2027 deadline.
• Performance was uneven across customer-facing businesses: Consumer EBITDA fell 1% and Business EBITDA fell 7%, with voice migration, legacy-product declines and brand investment weighing on results. BT expects Business to improve in the second half and said Consumer EBITDA should be broadly flat for the full year.
• BT expects the TalkTalk acquisition to cost around £400 million in FY2027, excluding it from current-year guidance while regulatory review continues. Separately, the company agreed a pension funding plan that is expected to reduce the deficit to about £300 million after bond issuance, while BT also plans a Verizon joint venture for its international operations.

BT Group Stock Performance

Shares of BT.A opened at GBX 217 on Friday. The stock has a 50 day moving average of GBX 204.65 and a 200 day moving average of GBX 205.83. BT Group has a 12 month low of GBX 173 and a 12 month high of GBX 247.30. The company has a market capitalization of £21.38 billion, a price-to-earnings ratio of 20.09, a PEG ratio of 0.38 and a beta of 0.69. The company has a current ratio of 0.89, a quick ratio of 0.83 and a debt-to-equity ratio of 187.58.

Analyst Upgrades and Downgrades

A number of brokerages recently weighed in on BT.A. Citigroup reduced their price objective on BT Group from GBX 175 to GBX 165 and set a “sell” rating on the stock in a research report on Monday, August 3rd. Berenberg Bank reaffirmed a “buy” rating and set a GBX 300 price target on shares of BT Group in a research note on Thursday. Finally, Deutsche Bank Aktiengesellschaft restated a “sell” rating and issued a GBX 150 price objective on shares of BT Group in a research report on Friday. Two analysts have rated the stock with a Buy rating and two have assigned a Sell rating to the stock. According to MarketBeat, BT Group currently has a consensus rating of “Hold” and an average price target of GBX 231.25.

Key BT Group News

Here are the key news stories impacting BT Group this week:

• Positive Sentiment: BT reported a 12% increase in first-half pretax profit to £1.07 billion, raised its interim dividend and maintained its outlook. The company also benefited from record fibre take-up and a narrowing pension deficit. These results helped lift the shares after the announcement. Article: BT Group Reports 12% Rise in Half-Year Pretax Profit
• Positive Sentiment: Berenberg reaffirmed its buy rating and set a GBX 300 price target, indicating a more optimistic view of BT’s prospects. Berenberg recommendations
• Neutral Sentiment: BT plans to cut nearly 8,000 jobs as part of a broad cost-saving programme. Lower costs could benefit profitability, but the scale of reductions may bring execution and workforce risks. Article: BT cuts almost 8,000 jobs
• Negative Sentiment: Deutsche Bank reaffirmed its sell rating and assigned a GBX 150 target, well below the recent trading level, potentially weighing on sentiment. Deutsche Bank recommendations
• Negative Sentiment: Openreach is expected to miss its 25 million fibre-broadband rollout target by year-end, though BT expects to reach the milestone in March. The delay could raise questions about rollout pace. Article: BT to miss Openreach fibre rollout target

BT Group Company Profile

BT Group is the UK’s leading provider of fixed and mobile telecommunications and related secure digital products, solutions and services.

BT Group consists of four customer-facing units: Consumer serves individuals and families in the UK; Business covers companies and public services in the UK; International serves multinational organisations headquartered outside the UK and overseas public sector customers; Openreach is an independently governed, wholly owned subsidiary wholesaling fixed access infrastructure services to its customers – over 700 communications providers across the UK.
British Telecommunications Limited is a wholly owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group.