The BT Group grew profits during 2Q, helped by an improved performance at its loss-making global services group.
Profit was up from £214 million ($334m) in 2009 to £284 million, despite a 4% fall in sales as the firm cut operating costs 6% to £4.4 billion.
The focus on cost cutting helped the telco boost ebitda 6% to £1.3 billion, however lower mobile termination income hit group revenues.
A pension deficit of £5.7 billion was unchanged from the March quarter, the firm said.
The troubled global services division cut its operating loss from £124 million in fiscal 1Q10 to £54 million in the recent quarter. Revised earnings from the unit plunged the company into the red early last year, sparking a company crisis.
Operating profit at BT Retail of £331 million was broadly in line with a year ago, while the wholesale business registered an 11% rise to £185 million.
Chief executive Ian Livingston said the results confirm the telco’s full-year forecasts. “We have made an acceptable start to the year, delivering improved financial results while investing in the future of the business.