BT share price is up by more than 1.80% today, becoming one of the best-performing stocks in the FTSE 100. The shares are trading at 103.50p, which is higher than this week’s low of 98.45p.
Last week, BT shares rose after the company reported a better-than-expected quarterly results. The company announced earnings decline of about 5% to £3.5 billion. Its revenue declined by 8% to £10.6 billion, mostly because of the weak performance of its BT Sports division. Still, the quarterly results were above the consensus estimates.
In a statement yesterday, the Communications Workers Union (CWU) warned that they were considering a strike later this year. The voting will start later this month and run through December.
They argue that the company has announced significant job losses even though it is already highly profitable. This year, the firm has announced plans to lay-off more than 9,000 jobs. That is in addition to the 13,000 cuts it announced in 2018.
In a statement, BT said that the layoffs were necessary since the company was going through a period of significant changes. The firm emphasised that some of these job cuts will come from largely not filling roles that open up. If workers vote in favour of the strike, it will be the first time in BT’s history.
BT Group has been under intense pressure in recent years. Data from Seeking Alpha shows that its total revenue has fallen from more than $32 billion in 2010 to $28.47 billion in 2019. Similarly, its profitability has fallen from more than $2.4 billion to $2.1 billion. The balance sheet has also expanded, with its long-term debt rising from more than $15 billion to $21 billion.
As a result, BT share price has also fallen over the years. The shares have fallen by more than 80% in the past five years and by 48% this year alone.
On a positive side, there has been talk of consolidation in the industry. A few months ago, it was reported that a KKR, a US private equity firm was considering placing a bid for the company.
The daily chart shows that BT share price has been under siege in the past few months. It is now trading at 104p, which is a few points below the descending green trendline that connects the highest points in June, September, and October.
It is also above the year-to-date low of 95p. It also seems to be forming a descending triangle pattern. Therefore, I suspect that the shares will remain under pressure so long as it is below the descending line at 105p.
