Why BT Group Shares Popped
May 10th 2013 4:32PM
Updated May 10th 2013 4:55PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: The company's market-topping first quarter -- adjusted EBITDA of 6.2 billion on revenue of 18.25 billion pounds -- reinforces optimism over management's recent cost control and expansion initiatives. While revenue for the quarter remained flat, strong demand for BT's new superfast fibre network, coupled with a full-year dividend hike, gives investors plenty of confidence in its growth prospects and financial health going forward.
Now what: Management now sees free cash flow of about 2.6 billion pounds in 2014/2015 -- up slightly from an earlier forecast of 2.5 billion -- and dividend growth of 10%-15% over the same period. "Our focus on improving efficiency across the business will allow us to continue to deliver strong financial results," said CEO Ian Livingston. "We have a lot more to do but we are now a lot better positioned to do it." Of course, with the stock now up more than 50% from its 52-week lows, I'd wait for some of the optimism to fade before buying into that bullishness.
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The article Why BT Group Shares Popped originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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