Heavy losses for struggling BT

LONDON, England (CNN) -- British Telecom has revealed more gloom for investors with second quarter losses after the failure of its doomed joint venture with U.S. rival AT&T.

Its shares on the FTSE 100 slipped 1.7 percent in early trading on Wednesday after announcing a pre-tax loss of £1.35 billion, compared with a £471 million profit last year.

BT says there will be no half-year dividend. There will be an end-of-year payment but this will be "substantially lower." It also says it expects costs savings of £575 million ($842 million) this year.

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Its finance director, Philip Hampton, is also leaving after November 2002. It represents another executive shuffle following the news that CEO Peter Bonfield will leave ahead of schedule in January.

"They are facing the truth as to how bad their situation is, so that may be considered a positive, but it's pretty poor data,'' said Sharon Coombs, European strategist at HSBC bank.

BT's earnings before interest, tax, depreciation and amortisation were £1.46 billion. Analysts had forecast between £1.47 billion and £1.51 billion.

Chairman Christopher Bland said in a statement: "Although the general economic outlook for the second half of the financial year is uncertain following the events in the U.S. on September 11, most of BT's businesses have strong market positions and have so far proved to be resilient."

BT and AT&T pulled the plug on their Concert joint venture last month at a cost of 2,300 jobs and billions of dollars.

Concert was formed in 1998 in an attempt to provide data communications to global multinationals around the world. But mounting losses and falling sales caused both companies to search for a way to end the venture.