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Web, alliances boost BTel
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May 19, 1999: 5:40 a.m. ET
Stock jumps 4% after U.K. telecom giant beats estimates, says alliances advancing
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LONDON (CNNfn) - British Telecommunications reported a 31 percent jump in fourth-quarter profit Wednesday to send its shares soaring in brisk trading.
The U.K. telecom giant said pretax profit climbed to 836 million pounds ($1.356 billion) in the three months to March 31, compared with 630 million a year earlier. The result was well above the top end of analysts' estimates and the consensus of 670 million pounds.
BT shares climbed 42 pence to 1,090 pence in early trading and Chief Executive Peter Bonfield said the trading outlook for 1999 remained positive. "The momentum going into this year still looks good and we will start to get the kick-in from our (recent) investments," he told CNN.
Bonfield pointed to the company's alliance with Japan Telecom in tandem with AT&T (T) and the development of cellular, data processing and Internet services as the key drivers of growth going forward. "We'll be up and running (with this alliance) by the end of the year and see the benefits going into next year," he said.
The growth in Net services was identified as the main driving force for inland call volumes which climbed 9 percent over the financial year. "This is an explosive part of the business," said Bonfield. "Out strategy is to make sure that the network is in place and we're selling to retail customers and packaging up the wholesale business."
Fourth-quarter revenue climbed 13.6 percent to 18.223 billion pounds, with acquisitions in Europe and Asia accounting for more than a third of the increase.
For the full year ended March 31, BT's pretax profit rose to 4.295 billion pounds from 3.214 while sales climbed to 18.223 billion from 16.039 billion.
The fourth quarter data include a 1 billion pound gain from the sale of the company's stake in former U.S. partner MCI.
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