LONDON -- BT Group (LSE: BT-A.L) has announced that pretax profit for the first three months of the year was 8% higher than a year ago. The U.K.'s biggest fixed-line telecom operator posted first-quarter earnings of 578 million pounds, which should put it on track for full-year profits of around 2.6 billion pounds.

BT Group said: "We have delivered another quarter of profit growth and the 11th consecutive quarter of double-digit earnings per share growth, although our quarterly cash flow was impacted by the timing of working capital movements."

The company added: "There were good performances in BT Retail, BT Wholesale and Openreach while BT Global Services was impacted by the tough conditions in Europe and the financial services sector."

Somewhat disappointingly, BT said revenue fell 6% and free cash flow was lower than expected. Nevertheless, its ability to lift core earnings by 2% to 1.5 billion pounds reveals a strong resolve by the company to cut cost and improve efficiency.

Today's result confirms BT Group's confidence in being able to raise its dividends by between 10% and 15% every year for the next three years.

In a recent podcast with Elissa Bayer of Williams de Broe, the wealth fund manager revealed that you are not going to get "shoot the lights out" growth with BT. Nevertheless, it should grow -- and grow its dividend at the same time.

Some of her other favorite income shares include GlaxoSmithKline, Vodafone Group, and Unilever. Their prospective dividend yields are 5.2%, 7.3%, and 3.8%, respectively.

Shares in BT fell around 4% this morning to 208 pence. However, with its earnings on track and a commitment to raising dividends, the prospective yield, which now stands at 5%, is looking even more attractive.

Today's fall is unlikely to perturb ace investor Neil Woodford, who has delivered an impressive 347% total return -- and thrashed the wider market -- during the last 15 years. What's more, you can discover the shares he now holds -- and which losers he's avoided -- within "8 Shares Held By Britain's Super Investor." You can download this free Fool report today, but hurry -- it's available for a limited time only.

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