Cable & Wireless (C&W) suffered a 23% fall in half-year profits after a testing period for its UK business.
Cable & Wireless said it was still optimistic about its profit outlook
In October it issued a profits warning saying it faced "difficult" UK market conditions including tough competition.
UK operating profits fell by 54% in the six months to 30 September, compared to the same period last year, as overall profits dropped to £134m ($233m).
But C&W shares rose 1.8% to 121p after announcing the resumption of its share buy-back plans.
The telecoms group has suffered a turbulent five years and has lost a quarter of its workforce in that time. Its share price has slumped from a high of £15 in early 2000.
There is no firm timetable for the £250m stock repurchase, launched in November 2004, with £75m bought so far.
In August, Cable & Wireless agreed to buy business telecoms provider Energis for £674m.
The takeover made C&W the UK's biggest telecoms network provider after British Telecom.
At the time, it announced the suspension of its share buy-back programme, but that is being resumed after the Office of Fair Trading sanctioned the Energis deal last month.
C&W said its cost cutting strategy was back on track following the Energis purchase, along with that of broadband provider Bulldog, with some 450 jobs axed in September.
"The path is clear, although the rapid rate of change in the UK may well lead to some short-term volatility in reported profits, which could well be exacerbated by... the Energis integration," said chairman Richard Lapthorne.
Nomura analyst Chris Alliott said the resumption of buybacks was a positive sign.
But he added: "We continue to believe that buying into C&W is too risky ahead of firm signs that pricing pressure in the UK corporate market ... are enabling margins to improve."