BT's profit declined 43% to €250 million ($351.9 million), down from €445 million a year ago.
Sales rose by 1.1% to €6.1 billion, however beating analysts’ forecasts of an average profit of €132 million on sales of €5.88 billion. Ebitda dropped 2.4% to €1.5 billion in the first quarter - again an improvement of analysts forecasts of €1.47 billion.
The market welcomed the result after recent under-performing quarters, with BT shares soaring 12.2% on the news, topping the FTSE 100.
In May BT management warned of a drop in sales this year due to lower mobile termination rates and costs associated with its troubled global services group.
It also foreshadowed the culling of 15,000 jobs in the year ahead, with 30% coming from the global services unit.
BT CEO Ian Livingstone said “BT Global Services is making progress although there is still much to do. The rest of the group continues to perform well, generating EBITDA growth of 6%.”
The global services unit, which brings in around 40% of the carrier’s total revenue, delivered an EBITDA decline of 66% to €72 million. BT’s wholesale unit dropped 1.2% to €373 million.
Livingstone added that the company was on track to cut costs and capital expenditure by over one billion pounds and “to generate group free cash flow of over 1 billion pounds this year.”
The carrier reported that through renegotiating contracts and merging operations, it had already achieved €417 million in savings. The CEO also reiterated that sales will drop between four and five percent this year.