BT BT Group PLC

(Rewrites, adds detail.)

By Simon Zekaria

LONDON--BT Group PLC (BT.A.LN) on Thursday recorded a forecast-beating jump in quarterly earnings on higher revenue, as more customers took up the telecomms giant's media services including its newly-acquired mobile business EE.

Pretax profit for the quarter to June 30 on an adjusted basis increased 16% year-over-year to 802 million pounds ($1.06 billion), ahead of consensus market expectations. Adjusted earnings before interest, taxes, depreciation and amortization totaled GBP1.82 billion, up 25%. Revenue on an adjusted basis soared 35% to GBP5.78 billion.

"We've made a good start to the year," said Chief Executive Gavin Patterson.

In the U.K.'s competitive industry for combined media services--where BT competes with companies like Sky PLC (SKY.LN), Liberty Global PLC's (LBTYA) Virgin Media and TalkTalk Telecom Group PLC (TALK.LN)--the telecoms incumbent is spending heavily on fiber-optic broadband as well as television content including Premier League and Champions League soccer.

By division, consumer revenue rose 9%, while revenue from BT's business and public sector division increased 18%.

BT said it remains on track to deliver on its full-year outlook. It expects growth in fiscal 2017 revenue and adjusted Ebitda to total around GBP7.9 billion.

It also forecast at least 10% growth in dividend and a share buyback worth GBP200 million.

At 1053 GMT, shares had risen 3% to 414 pence as investors reacted positively to the results. "BT has acted decisively to target the quad-play market that large telecoms are currently chasing," said Hargreaves Lansdown analyst George Salmon.

Mr. Patterson downplayed the impact of Brexit on the fortunes of the group. The U.K.'s vote to the leave the European Union last month sparked fears that the country would enter into an economic downturn amid consumer uncertainty, but the CEO said the company performs resiliently during recessionary times as customers stay at home more and use media services.

Still, Mr. Patterson said BT may focus on markets outside Europe in a post-Brexit Britain, without elaborating, should the fundamental characteristics of the economy change.

Separately, Mr. Patterson said the company is eager to strike a negotiated deal with Ofcom after the U.K. communications regulator this week called on BT's infrastructure division Openreach to be legally separated from the rest of the company. BT rejects that idea, and other plans for the division by Ofcom, and says there are "points of difference" between the position of the regulator and BT.

Resolving the matter quickly would allow the company to make necessary investment in the U.K.'s network, he said.

"There is a lot at stake here," he told reporters.

Write to Simon Zekaria at simon.zekaria@wsj.com. Tapan Panchal contributed to this article.

(END) Dow Jones Newswires

July 28, 2016 07:45 ET (11:45 GMT)

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