BT issues surprise profits warning

Telecoms giant BT issued a surprise profits warning today after its division providing services to multinational companies failed to hit targets.

BT said its Global Services arm continued to grow strongly but the slower-than-expected delivery of cost savings had impacted on earnings.

It also blamed a continued decline in higher margin UK business.

As a result, underlying earnings for the group in the second quarter of the financial year will be slightly below expectations, BT said.

All the company’s other divisions, including BT Retail, have continued to deliver results in line with or ahead of expectations, it added.

BT said group finance director Hanif Lalani would replace Global Services chief executive Francois Barrault, who has resigned.