After a solid start to the year, yesterday saw the BT (LSE: BT-A) share price fall by over 7%.

The stock had been slowly rising prior to this month. However, July has shaved off nearly 15% of its price as investors have turned their back on the telecommunications giant.

But why is this? And is this dip an opportunity for me to buy some cheap shares? Here’s what I’m doing.

The lowdown

So, what’s been going on with BT that has led to this drastic fall?

Firstly, yesterday saw the business update investors with its Q1 results. Within the period, revenue grew for the first time since 2017 to £5.1bn, up 1%. Alongside this, adjusted EBITDA rose 2% to £1.9bn, fuelled by revenue growth and strong cost control.

The business has also continued the expansion of its Openreach full fibre network, which now reaches over 8m homes across the UK. Its 5G network now also covers more than 55% of the population, highlighting the strides it’s taken since its last update.

However, the BT share price fell as low as 10% yesterday as it saw its pre-tax profits down 10% year on year to £482m. With inflation continuing to bite, this decline was fuelled by a weak performance from the firm’s enterprise division. Revenues in this arm fell 7% as CEO Philip Jansen highlighted the “ongoing challenges” the division was facing.

The stock has also been dragged down by staff strikes. Occurring today and Monday, over 40,000 staff — who are members of the Communication Workers Union (CWU) — have taken this action after failed negotiations.

BT has failed to meet the CWU’s expectations with its previous offers. And speaking on the strikes, CWU General Secretary Dave Ward stated how the company releasing its results just before the action “smacks of arrogance and complete contempt for frontline workers”.

What I’m doing

This clearly doesn’t paint a good picture for BT. However, I think this fall could be an opportunity for me.

Firstly, I like the stock due to its chunky dividend yield. This currently sits around 4.7%, comfortably above the FTSE 100 average. With stagnant cash losing value, this could be a sensible play. To add to this, BT also has a forwards price-to-earnings ratio of 8.2.

With its large infrastructure also comes, to some degree, more pricing power. After all, higher prices for broadband and mobile phone contracts helped the business return to sales growth. As rates are expected to surge further into the year, this makes BT a solid buy for me.

The Competition and Markets Authority recently cleared the merger of BT and Warner Brothers Discovery. This will see both firms’ sports divisions unite. And the move could be worth up to £500m for BT.

So, despite the short-term headwinds the business is facing, I’d still happily buy the company’s shares today. Its sales growth this quarter shows the business is moving in the right direction. And with its pricing power, this also means BT has the capability to perform well in these volatile times.

The post The BT share price fell yesterday! Here’s what I’m doing appeared first on The Motley Fool UK.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.