BT Profit Third Quarter Net Profit Fell 51% After Italy Write-Down

By Simon Zekaria

LONDON--BT Group PLC (BT.A.LN) Friday reported a 51% fall in net profit on the bigger-than-expected write-down related to an accounting scandal at its business in Italy, details of which sent the British telecom operator's stock reeling when they were announced earlier this week.

The U.K.-based media company posted net profit of GBP374 million ($469 million) in the third fiscal quarter to Dec. 31, down from GBP766 million in the same period a year earlier.

BT said earnings for before interest, taxes, depreciation and amortization on an adjusted basis rose 18% to GBP1.87 billion, in line with company forecasts.

Revenue rose 32% to GBP6.13 billion, also in line with estimates, though when adjusted and at constant currencies, revenue fell 1.5%.

Tuesday, BT lowered its forecasts for revenue, earnings, and cash flow over the next two years, citing the problems in Italy where it investigating false accounting by senior executives which inflated profits. BT also gave a downbeat outlook for trading in the U.K. public sector and in international corporate markets. BT shares fell 21% on the day as investors digested the news.

Friday, BT reiterated that it expects adjusted Ebitda of around GBP7.6 billion this fiscal year.

-Write to Simon Zekaria at [e-mail]

(END) Dow Jones Newswires

January 27, 2017 02:58 ET (07:58 GMT)

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