London - Shares in British Telecommunications (BT) fell sharply early yesterday after the company announced a 33 percent fall in nine-month profit and plans to slash 3000 managerial jobs in Britain.
BT stock fell by 15 percent, or 191p, to 995p in early trading on the London market.
The sell-off followed a sharp deterioration of its interim profit, which the company said was hit by intense competition from heavyweight competitors around the world. In particular, the traditional fixed line business has suffered.
BT spooked investors with a warning that profit in the final quarter of this financial year was unlikely to do much better.
Iain Vallance, BT`s chairman, said: "We face increasing competition as the globalisation of our industry continues.
"In this quarter, competitive pressures have adversely affected operating margins in the UK fixed voice telephony market. The results also reflect the costs of meeting increased customer demand and of growing new areas of business."
Pre-tax profit in the nine months to December fell by 33 percent to P2,313 billion from P3,459 billion in the preceding period.
BT said the job losses, targeting 10 percent of its total managerial force in Britain, would mostly be achieved through voluntary redundancies over the next six to nine months.
BT employs about 118 000 people in Britain and a total of 125 000 worldwide.
The company said it had suffered exceptional costs of P10 million in the third quarter because of Y2K transition and of P14 million from its disengagement from MCI, the US carrier. BT warned it would suffer a further hit of P20 million from Y2K changes in the fourth quarter.
It also warned that it did not expect its total operating profit before exceptional items in the three months to March, the final quarter of its financial year, to be "materially different" from its third quarter.
In the third quarter ending December 31, BT said operating profit had declined by 16,4 percent to P761 million against P911 million in the same period the previous year.
Pretax profit for the third quarter decreased by 24,1 percent to P651 million, while turnover grew by 19,2 percent to P5,585 billion in the same period a year before.
Earnings a share for the third quarter were 7p, down from 9,2p the previous quarter, and 24,9p for the first nine months against 37,5p for the same period the previous year.