Will BT shares be buoyed by Q3 20/21 earnings

There has been lots of doom and gloom surrounding BT shares in recent months, given Virgin Media’s recent 5G snub. Will its Q3 2020/21 results offer some respite for the BT share price in the coming months?

  • Third quarter (Q3) 2020/21 financial results due to be released tomorrow (3 February 2020)
  • Q3 earnings expected to have declined by 5.7%
  • Virgin Media 5G snub and legal claims hit BT hard
  • However, profit guidance rises due to fibre rollout and ‘unbreakable’ ties with EE

BT Group PLC (BT.L) is set to publish its latest Q3 2020/21 financial results on 3 February, with significant interest in the figures to inform the potential upside in the BT share price.

BT shares appear to have plateaued around the 125p-127p mark in recent days, which marks a 20p decline from its New Year high of 146.85p on 7 January. Nevertheless, it’s still hovering around 25-27p higher than its share price in autumn 2020. The consensus is that Q3 2020/21 revenues will have declined approximately 5.7%, based on predictions using the BT Group earnings forecast.

Virgin Media turn to Vodafone for its new 5G mobile network

The BT Group was dealt a hammer blow in recent weeks when Virgin Media shunned it in favour of launching its new 5G service using the Vodafone (VOD.L) mobile network. It’s the first sign of Virgin Media cutting its ties with BT’s EE network, with Virgin Media anticipating all of its mobile users to be operational on the Vodafone network by early 2022.

Virgin Media is also seeking competition approval from the Competition and Markets Authority (CMA) for a £31-billion merger with Telefonica-owned O2, which could create a major telecoms competitor for BT.

Overcharging claims and BT Openreach employee strikes the cause of recent downturn

The primary cause of the fall in the BT share price since early January has been two-fold. Firstly, it was revealed that the BT Group is facing legal claims of up to £600 million for overcharging approximately 2.3 million landline customers.

In addition, BT’s Openreach employees threatened to go on strike over low wages, causing shares to plunge by as much as 8%. Openreach remains a vital part of BT’s short-to-medium-term strategy, given the UK government’s goal to provide full-fibre connectivity to all households by 2025, with Openreach investing in more engineers to ramp up installations nationwide. BT's fibre-to-the-premises (FTTP) network has doubled the number of household orders, which has led to management upping the BT Group's full-year profit guidance from £7.3 billion to £7.5 billion.

Will BT’s ‘unbreakable’ home internet deal with EE and investment in new recruits bring positivity?

With Openreach likely to be at the heart of the UK’s fibre connectivity ambitions for years to come, there is also good news regarding a new ‘unbreakable’ home internet service, powered in tandem by BT and EE. BT’s new Halo 3+ package will include a ‘Hybrid Connect’ function, which will instantly connect to EE’s 4G mobile network if the BT smart hub detects a wired broadband outage. This hybrid technology is a UK first and will offer greater reliability for users during and after the Covid-19 pandemic.

In addition, the BT Group is set to recruit 400 new graduates and apprentices throughout 2021, spanning engineering, cybersecurity, and customer science specialisms, in another move that’s viewed as a vote of confidence from the company’s upper echelons.

Providing the Q3 2020/21 financial results are in line with industry forecasts, it would appear there is more than enough potential in BT’s Openreach and EE partnership to offer an upside for BT shares in H1 2021.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.