(Adds CEO comments, shares)
LONDON, July 21 (Reuters) - British broadband operator TalkTalk upgraded its guidance for full-year earnings on Tuesday after seeing trading recover in June and July.
The company said it expected headline core earnings for its 2021 financial year to be stable or to grow, an improvement on its previous forecast for a flat performance.
It reported headline revenue down 7.5% at 358 million pounds ($454 million) for its first quarter.
CEO Tristia Harrison said TalkTalk was strengthening its outlook based on the recovery it was seeing in trading and costs. "We've seen huge surges in demand driven by video, gaming and homeworking," she said.
TalkTalk's revenue was hit during lockdown by a industry-wide drop in customer acquisitions and connections, a continuing decline in voice calls and the cancellation of sporting events.
"Through June and July we've bounced back very strongly, our fibre growth is back up, our ethernet - which is our B2B business - is back up, we are seeing good green shoots on revenue and really importantly, we've been able to drive incremental and ongoing costs savings," she said.
TalkTalk will this month launch full fibre to the premises plans via BT's Openreach network, she said.
The company was still in talks with Openreach about a new wholesale deal, she said, adding: "In terms of a long-term agreement, it will take a bit of time."
Shares in TalkTalk reversed early gains to trade down 3% at 76.3 pence at 0800 GMT.
$1 = 0.7882 pounds Reporting by Paul Sandle; editing by Sarah Young