BT blames cost of iPhone X for earnings dip at EE mobile unit

BT blamed the upfront costs of the £1,000 iPhone X for a squeeze on profitability that rattled investors as the company heads into a crucial series of decisions on regulation, pensions and the Premier League EE, which has been a bright spot for BT as other divisions have struggled, increased revenues 4pc in the third quarter, but saw its underlying earnings dip 6pc on last year. Gavin Patterson, BT’s chief executive, said the upfront costs of the new handset would lead to higher earnings for EE over time, but the initial impact contributed to overall earnings that were slightly short of forecasts. Investors bruised by BT’s torrid 2017 of accounting scandals, regulatory fines and profit warnings, sent the shares sliding 2.2pc to 250.3p on Friday, regardless of Mr Patterson’s assurance that the company will hit its full-year targets. Despite a further slowdown in the broadband market, which BT said was reaching maturity before the technology shift to ultra-fast fibre optics, the company highlighted progress in its ­attempts to sell bundles of telecoms and TV services to households. The ­average BT customer now subscribes to 2.02 services, an increase of 3pc. BT Total revenues for the quarter were down 3pc at £6bn, dragged lower by the continuing struggles of the Global Services IT outsourcing division. BT is in the midst of an overhaul and digital modernisation programme that could trigger sales of overseas network assets, but sales for the business fell 9pc. BT’s public sector business has also suffered in the squeeze on government contracts, but there were no signs of the serious troubles that have hit Carillion and Capita. Mr Patterson now faces a gauntlet beginning with the Premier League rights auction, in which first round bids are due next Friday. The risk of steep inflation has decreased after tensions …Read the rest of this story

Source:: https://finance.yahoo.com/news/bt-revenue-slips-business-struggles-082134526.html