British Telecom reported a 45% drop in profits for the first half of the year, prompting a revived cost-cutting target for the year from £1 billion (€1.1b) to £1.5 billion.
The results however defied market expectations, BT reported net profit of £428 million for the September quarter, up 13% from £378 million during the same period a year ago.
Revenue for the quarter fell 3% to £5.12 billion from £5.30 billion in year on year comparisons. BT CEO Ian Livingston while progress had been made in the last quarter, there was still much to do.
“With total cost reductions of over £900 million in the first half, we have made significant headway towards our previous target of well over £1 billion for the full year. We now expect to generate at least £1.6 billion of free cashflow this year, compared with our previous target of over £1 billion,” he added.
BT had previously announced plans to slash 30,000 positions.
The worst performing division continued to be the global services unit with profits for the six months almost halving to £547 million.
The carrier blamed economic conditions, lower wholesale call volumes in Europe, mobile termination rate reductions and the continued decline in UK fixed calls.
BT Vision also struggled to keep up with market pace dropping nearly half of its customers adds in the last quarter. The unit signed 18,000 new customers in Q3 compared to double that in Q2.