LONDON (AP) — Shares in BT Group PLC fell yesterday after the company's downbeat report on its Global Services division, a provider of communication services for companies and government agencies.

The telecommunications company said in a trading update that it expected to take a £340 million ($470 million) charge following a review of contracts and the Global Services division's finances.

"These ongoing reviews reflect changed circumstances and a more cautious view of the delivery of cost efficiencies and contract performance, particularly in the light of the current economic climate," said Ian Livingston, BT's chief executive.

"The performance of the rest of the group is ahead of expectations for the third quarter but unfortunately this will be more than offset by the issues in Global Services," he added.

BT shares closed down 9.1 percent at 111.80 pence ($1.54) on the London Stock Exchange.

"Only recently seen as a growth driver at BT, the Global Services division is now proving a major drag," said Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers.

"Contracts negotiated in healthy times have subsequently come under profitability pressure, with the economic difficulties hitting many of the divisions' major international customers now impacting," Bowman said.