Chris Alliott Lower Quotations

BT's 2Q 05/06 results would appear at first glance to be bang in line with our below-consensus expectations. But slightly more-than-expected margin weakness and lower cash flow is unlikely to be taken well. Our sell rating is maintained.

Sentiment is likely to be hit hard ... Investors were disappointed by the warning in October, as it was one of the first operators to lower expectations. This second hit to expectations is only likely to raise more questions.