BT Group plc (LON:BT.A) will on Friday for the first time report its first quarter results without disclosing net additional customers in broadband and mobile.
The telecoms giant’s new reporting on key performance indicators (KPIs) will draw attention away from volume based subscriber metrics towards the value generated from each customer.
Analysts at RBC Capital Markets accused the company of trying to hide bad news, adding that the omission of broadband and mobile net adds is likely to lead the market to "assume the worst".
“While we understand the desire to move away from 'net adds' as the market matures, not disclosing such important metrics may cause concern, given the widely held sceptical view that companies tend to obfuscate bad news. Indeed, reduced disclosure often, in our view, portends badly for future operational performance,” RBC said, suggesting investors will be left "flying blind".
BT will restrict its first quarter results to include revenues, average revenue per user, earnings, capital expenditure, free cash flow and net debt. The group has adopted the new KPIs along with restated IFRS 15 accounting, which it expects to have an “adverse impact” on this year’s results.
Jefferies reckons the key focus for the first quarter update will be on the business and public sector division following a weak earnings performance.
The business and public sector saw declines in underlying earnings (EBITDA) accelerate from 3.4% in the first quarter to 8.8% in the second quarter, 11% in the third and 13% in the fourth.
“We forecast a sharp improvement (-4.6% y/y at £326m) this quarter as the (high-margin) lost public sector contracts mostly lap out of comparatives,” Jefferies said.
Investors will also be looking out for updates on BT’s restructuring as well as the outlook for the year.
The restructuring includes cutting jobs and moving its headquarters out of central London to save costs, launching new combined packages for the consumer division and merging its enterprise and public sector units into one.
Trump’s tax cuts expected to boost GDP
Away from corporate news, the market will turn its attention to US economic growth data for the second quarter.
Economists expect gross domestic product (GDP) in the second quarter rose 4.2% compared to the previous three months or grew 2.3% compared to the same period a year ago.
US President Donald Trump will most likely take the credit if GDP reaches such heights, with the economy expected to receive a boost from his tax cuts.
Trump has pledged to hit annual growth “much higher” than 3%, a level not seen in 14 years. Last year the economy grew by 2.3%.
Significant events due:
Trading updates: BT Group plc (Q1) (LON:BT.A), CYBG PLC (LON:CYBG)
Interims: Pearson plc (LON:PSON), Reckitt Benckiser PLC (LON:RB.), Rightmove PLC (LON:RMV), Jupiter Fund Management PLC (LON:JUP), Equiniti Group PLC (LON:EQN), Hutchison China Meditech Ltd (LON:HCM), UK Mail Group PLC (LON:UKM), Greencoat UK Wind PLC (LON:UKW)
AGMs: Vodafone PLC (LON:VOD), United Utilities PLC (LON:UU)
Economic data: US Q2 GDP