Britain's BT Says Q4 Profit Up

By Calvin Azuri

TMCnet Contributing Editor

 

BT Group (News - Alert) PLC, leading provider of communications solutions and services, announced a 2.5-billion-pound (€3.65 billion; U.S. $4.96 billion) share buyback program on Thursday as it disclosed an 11 percent gain in fourth quarter profit. The profit has been bolstered by sales of data network and broadband Internet, according to an Associated Press report.

 

The company estimates that the share buyback program will be completed within two years and has raised its full-year dividend payment by 27 percent to 30 cents per share.

 

BT made the announcement as it reported March quarter results. BT reported net income of $946 million on sales of $10.5 billion for the quarter ended March 31, both up from a year ago.

 

The company added that the solid results would signify that it had displaced Richard Branson’s Virgin Media to become Britain’s top broadband supplier.

 

But BT also announced restructuring costs of 450 million pounds, causing the company’s stock to dip 2.1 percent to $6.10 per share. The greater part of these costs would be incurred in 2007 and 2008.

 

Chief executive Ben Verwaayen was quoted as saying the costs were due to greater focus on delivering software based services rather than broadband.

 

However, Investec analyst Christian Maher reportedly said that the lower share price might have resulted from rumors of the share buyback plans before the announcement was made.