BT issued a profit warning today, saying the fiscal year's earnings before interest, tax, depreciation and amortisation (ebitda) would be less than last year's.
The company blamed its poor performance on its failure to improve the profitability of its Global Services division - billed as central to BT's future growth and direction - which provides networks and IT services to multinationals.
The head of Global Services, François Barrault, has resigned to be replaced by BT's finance director, Hanif Lalani.
According to the Financial Times, the division had an ebitda margin of 11.2% in 2007-08, but BT said it was expected to be 7 to 8% in 2008-09. In early trading, BT shares fell 18.3%.
BT was reported by the FT saying that its Global Services' revenue would grow by 15% in the three months to September 30 compared to the same period last year, but ebitda of about £120 million (€153.48 million) would be "significantly below expectations".
BT's CEO Ian Livingston stressed that BT's other operating divisions - BT Retail, BT Wholesale and BT Openreach - were performing in line or ahead of expectations.