BT Group (BT) Shares Surge on New CEO's Promises Amid Disappointing Quarterly Results"

BT Group (LON:BT) saw its shares soar by 11% to 125.5p in early trading, fueled by optimism surrounding the telecom giant's new CEO, Allison Kirkby (NYSE:KEX), and her ambitious plans to revitalize the company.

Despite offering another disappointing quarter to end the previous year, BT Group reported a modest drop of 0.2% in group revenues and a 3.4% decline in EBITDA. Analysts at UBS highlighted that misses in Openreach/Business offset a beat in Consumer, with one-off impacts contributing to the EBITDA miss.

However, investor sentiment was lifted by Kirkby's commitment to transform BT into a "Britain first" business. She pledged to divest some parts of the global company and increase dividends for shareholders. Kirkby's proactive approach since assuming the role in February has resonated well with shareholders, particularly evidenced by the 4% rise in dividends to 8p, totaling £750 million.

BT Group also provided reassurance by indicating that it had surpassed its peak in capital expenditure for its fiber build, with capex expected to trend below £4.8 billion annually. Analysts at Morgan Stanley noted that the company's free cash flow guidance surpassed consensus expectations, both in the near term for FY25 (16% ahead) and the mid-term for FY27 (~50% ahead).

Despite facing challenges in certain segments, BT Group's strategic initiatives under its new leadership have injected optimism among investors, driving a notable surge in its share price. As Kirkby steers the company towards a new direction focused on enhancing shareholder value and prioritizing the UK market, the market eagerly awaits further developments.