Telecoms operator BT beat some expectations with its best quarter of revenue growth for three years.
First-quarter profit before tax and exceptional items jumped 20 per cent to £511 million sterling on 5 per cent higher revenues of £4.783 billion, helped by 48 per cent higher "new wave" revenues, which include network, broadband and mobile services, acquisitions and a below-expected interest charge.
But core earnings before interest, tax, depreciation and amortisation slipped 2 per cent to £1.363 billion in the quarter to the end of June and some analysts questioned company insistence that trends were improving.
BT's shares, which have climbed about 16 per cent since it published annual results in May - in part because of the company's commitment to raise dividends - slipped 1.49 per cent 231-3/4 pence this morning.
Analysts said the numbers were unlikely to trigger any upgrades and on a day that saw French peer France Telecom and Spain's Telefonica beat all forecasts, there was better value elsewhere in the telecoms sector.
Stripping out a contribution from newly acquired network services group Infonet and the buyout of Italian telecoms group Albacom, revenues rose by 3 per cent, helped by a £1.385 billion contribution from new wave revenues.
BT, which has been battling to increase margins in new services as rising competition for traditional fixed-line services mounts, said 5.6 million broadband customers were now using its high-speed Internet services.
Underlying earnings per share rose 25 per cent to 4.5 pence, while net debt slipped by 4 per cent to £8.121 billion.