Liberty Global Misses on Q4 Earnings

Liberty Global plc. (LBTYA) declared disappointing financial results for the third quarter of 2013 as both the top and bottom line significantly lagged the respective Zacks Consensus Estimates. In the reported quarter, the company added 314,000 organic revenue generating units (:RGU), down 1.9% year over year.

Quarterly GAAP net loss was $830.1 million or $2.09 per share compared with a net loss of $22.4 million or 8 cents per share in the prior-year quarter. However, adjusted earnings per share of 9 cents were substantially below the Zacks Consensus Estimate of 46 cents. Quarterly total revenue of $4,371.2 million was up 73.5% year over year, but fell below the Zacks Consensus Estimate of $4,422 million.

Cost of operations was $1,702.9 million, up 98.2% year over year. Operating income was $521.9 million, down 2.5% year over year. Operating margin was 11.9% compared with 20.2% in the year-ago quarter.

During the first nine months of 2013, Liberty Global generated $2,466 million of cash from operations compared with $1,886.2 million in the year-ago period. Free cash flow in the reported period was $665.8 million against $435.5 million in the prior-year quarter.

At the end of the third quarter of 2013, Liberty Global had $5,513.6 million of cash and marketable securities and $43,147.6 million of outstanding debt on its balance sheet compared with $2,989 million and $27,524.5 million, respectively, at the end of 2012.

Subscriber Statistics

As of Sep 30, 2013, Liberty Global had a total of 24,473,800 customers. Out of the total, customer count for European Operations, VTR and Other operations were 23.009 million, 1.1938 million and 0.271 million, respectively. The total Single-Play customer count was 10.825 million, which remained same year over year. The total Double-Play customer count was 3.924 million, up 32.4% year over year. The total Triple-Play customer count was 9.7248 million, up 67.8% year over year.

During the reported quarter, Liberty Global added 314,000 organic RGUs including net gains of 214,000 and 153,000 subscribers for broadband Internet and telephony services respectively, and a net loss of 53,000 subscribers for video services. At quarter end, the company had over 365,000 Horizon TV subscribers in the Netherlands, Switzerland, Ireland and Germany. Liberty Global had more than 1.8 million TiVo Inc. (TIVO)-platform based video subscribers with a quarterly net addition of 165,000 subscribers. Moreover, the company had 4.05 million mobile subscribers.

Segment-wise Results

Total revenue from the European Operations division was $3,947.8 million, up 83.7% year over year. Within this segment, revenues from Western Europe were $3,635.3 million, up 96.9% year over year. Revenues from Central and Eastern Europe were $279.1 million, up 1.9% year over year. Revenues from Central and other operation were $33.4 million, up 15.2% year over year. VTR Chile revenues were $244.8 million, up 1.6% year over year. Corporate and other revenues were $199.8 million, up 32.9% year over year.

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Liberty Global Misses on Q4 Earnings