BT On Track as Profit Rises

By Simon Zekaria

LONDON--BT Group PLC (BT) Thursday said it is on track to meet its full-year expectations after it recorded a rise in first-quarter profit despite lower revenue, due to a boost in demand for its fiber-optic broadband service and sports television channels.

The U.K.-based telecommunications group said net profit in the three months to June 30 rose to GBP511 million ($797 million) from GBP441 million a year earlier.

Earnings before interest, tax, depreciation and amortization on an adjusted basis rose 1% year-over-year to GBP1.45 billion, in line with consensus market expectations. Previously, BT said it expected "modest growth" in adjusted Ebitda in fiscal 2016.

Still, revenue fell 2% year-over-year to GBP4.28 billion, lower than market forecasts.

"This is an exciting time at BT," said Chief Executive Gavin Patterson. Mr. Patterson also said more than 100,000 consumer mobile customers have signed up, as the operator bids to complete its multi-billion dollar acquisition of mobile operator EE.

In the fight with rivals to offer a full range of telephony and media services, BT has paid billions of dollars to secure key exclusive live English and European soccer TV rights to bulk up its sports channels.

BT's sports-broadcasting platform is key to its core broadband business and to plans to compensate for declining fixed-line telephony customers, that is bringing stiff competition to the pay-TV market.

BT shares closed Wednesday at 474 pence, valuing the company at GBP39.5 billion.

Write to Simon Zekaria at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires