Liberty Global Posts Wider Quarterly Loss as Investments Suffer

Liberty Global Plc (LBTYA), the cable company controlled by billionaire John Malone, reported a wider quarterly loss after debt and interest expenses grew.

The net loss widened to $830.1 million, or $2.09 a share, from $22.4 million, or 8 cents, a year earlier, the London-based company said in a statement yesterday. Revenue rose 74 percent to $4.37 billion, missing analysts $4.42 billion average estimate, according to data compiled by Bloomberg.

Liberty Global blamed the loss on its investments in derivative instruments, as well as higher expenses from interest and income taxes. Malone said in July that hes willing to take on debt to expand his European operations because he expects the cost of paying back loans to decline as economies improve and inflation rates rebound from crisis levels. The company generated about 90 percent of its revenue from Europe last year.

Interest expenses increased to $605.7 million from $351.8 million a year earlier while debt and lease obligations more than doubled to $854.1 million from $363.5 million, the company said. Losses from derivative investments, investments that can be used to hedge risk, rose to $675 million from $569.9 million. Earnings last year were helped by a sale of interest in Austar United Communications in the second quarter.

Liberty Global shares fell as much as 1.7 percent to $74.74 in extended trading after the close in New York. The stock had climbed 21 percent this year.

As part of the companys expansion, Liberty Global bought the U.K.s Virgin Media Inc. this year. Dutch pay-TV provider Ziggo NV (ZIGGO) said last month it rejected a takeover offer from Liberty Global, and Malones company was outbid for Germanys Kabel Deutschland Holding AG (KD8) by Vodafone Group Plc (VOD) in June.

Liberty Global maintained its stock-buyback program during the merger campaign, repurchasing $500 million worth of shares last quarter.

We remain on track to complete our two-year target for $3.5 billion of buybacks by mid-2015, Chief Executive Officer Mike Fries said in yesterdays statement.

Liberty Global added 314,000 subscribers last quarter. That beat the 223,000 additions that Vijay Jayant, an analyst with ISI Group, predicted. Customer additions in western Europe are improving as competitive pressures in some markets abate and the company lost fewer analog cable TV customers than expected, Jayant said in a note to investors.

Higher sales of triple-play packages, which combine phone, TV and Internet service, contributed to customer additions, Liberty Global said.