BT, the telecoms giant, today announced better than expected results but at 45% down, is it time to sell BT shares?
BT announced a pre tax profit fall to £272 million, down 45% on the same period last year.
These results though were better than the market expected and led to an early rise in the BT share price.
Ian Livingstone, Chief Executive, said ‘We have made a solid start to the year against a background of challenging trading conditions. BT Global Service is making progress although there is still much to do. The rest of the group continues to perform well.’
However, the company’s pension deficit doubled in the quarter, up from £4bn gross at the end of March, to £8bn gross (£5.8bn net of tax) at the end of June.
BT continue with the same full year forecast – a revenue reduction of 4-5%, a reduction in capital expenditure and operating costs of £1bn+ and free cash flow of £1bn+ in 2009/10 before pension deficit payments and after costs of restructuring BT Global Services.’
The BT share price rose on the better than expected results.
At the time of writing the share price was around 10% up at 123.9p.
As to the question of whether ‘it’s time to sell BT shares?’, the view from The Share Centre is ‘Despite today’s positive results we continue to list BT as a sell, given its huge pension deficit which rose to £5.8bn in June. We suggest investors consider selling to capitalise on today’s rise.’
Investors should of course make their own judgements on buying or selling shares and if in doubt seek independent financial advice.