However, the underlying increase in profits was only 3 per cent as last year's pounds 596m figure was depressed by a loss of pounds 135m on business disposals, primarily the sale of Mitel of Canada.
The volume of inland calls - often taken as an indication of the state of the economy - rose by 2 per cent on a 12-month moving average following static growth during the previous financial year. But discounts meant turnover from inland calls was almost unchanged at pounds 1.26bn.
International call volume increased by 7 per cent, with turnover from the calls up 14.7 per cent to pounds 499m. International turnover benefited from a weaker pound, but a compensating increase in payments to operators overseas for calls meant the net effect on BT's results was neutral.
Overall turnover for the first quarter increased to pounds 3.33bn from pounds 3.27bn a year earlier. Earnings per share rose to 7.9p (5.6p).
BT shed 1,200 jobs during the quarter and plans to have cut a total of 15,000 by the year-end.
Tony Young, general secretary of the National Communications Union, said it was 'nothing less than an insult' that on the day BT announced staff costs down 3.7 per cent and profits up 27 per cent its pay offer had been increased by only 0.15 per cent to 1.65 per cent.
Those attending BT's annual meeting in Harrogate today will be greeted by union activists with leaflets pointing out that an internal survey shows three-quarters of employees believe the changes in BT are bad for them and only 12 per cent have confidence in senior management.Reuse content