Liberty Global (LBTYA) Incurs Loss in Q4, Revenues Lag - Analyst Blog
Liberty Global Plc. (LBTYA) declared disappointing financial results in the fourth quarter of 2014. The company posted loss in the reported quarter while the Zacks Consensus Estimate projected a net gain. The top line also lagged the Zacks Consensus Estimate. Notably, in the fourth quarter, Liberty Global added 351,000 organic revenue generating units (RGU), down 15% year over year.
Quarterly GAAP net loss came in at $523.4 million or 62 cents per share compared with $121.2 million or a loss of 16 cent per share in the prior-year quarter. However, adjusted net loss per share of 17 cents was in sharp contrast to the Zacks Consensus Estimate of net income of 12 cents per share. Meanwhile, quarterly total revenue of $4,615.2 million was up 3.3% year over year but lagged the Zacks Consensus Estimate of $4,748 million.
Cost of operations totaled $4,341.9 million, up 9.9% year over year. However, operating income came in at $273.3 million, down a substantial 47.2% year over year. Operating margin stood at 5.9% compared with 11.6% in the year-ago quarter.
In 2014, Liberty Global generated $5,603.2 million of cash from operations compared with $3,931.3 million in 2013. Free cash flow in 2014 stood at $2,918.8 million against $1,449.8 million in 2013. At 2014-end, Liberty Global had $2,966.7 million of cash and marketable securities and $44,608 million of outstanding debt on its balance sheet compared with $6,193.1 million and $43,681 million, respectively, at the end of 2013.
Subscriber Statistics
As of Dec 31, 2014, Liberty Global had 27.3095 million subscribers, which constitute 55.9419 million RGUs. Of the total, 24.3357 million were video RGUs, 17.2753 million were broadband Internet RGUs and the remaining 14.3309 million were telephony RGUs. Moreover, the company had 4.5281 million mobile subscribers with a quarterly addition of 176,400.
The total Single-Play customer count stood at 10.7309 million, up 0.8% year over year. The total Double-Play customer count was 4.5249 million, up 15.1% year over year. The total Triple-Play customer count stood at over 12.0537 million, up 21.5% year over year.
During the reported quarter, Liberty Global added 351,000 organic RGUs including net gains of 242,000 and 145,000 subscribers for broadband Internet and telephony services, respectively. However, the company lost 35,000 video subscribers.
At the end of the reported quarter, the company had over 914,000 Horizon TV subscribers in the Netherlands, Switzerland, Poland, Ireland and Germany. Liberty Global had around 2.5 million TiVo Inc. (TIVO) developed platform based video subscribers. The company also added a net 100,000 net-generation video subscribers in the quarter.
As of Dec 31, 2014, Liberty Global had 15.9 million digital video subscribers with a digital technology penetration of 68% and 7.6 million analog video subscribers. The next-generation (Horizon and TiVo-platform) video subscriber base has over 3.4 million users, reflecting 14.5% penetration of digital footprint.
Segment-wise Results
Total revenue at the European Operations division was $4,303.5 million, up 4% year over year. Within this segment, revenues from Western Europe were $4,012 million, up 5.2% year over year. Revenues from Central and Eastern Europe came in at $299.1 million, down 8.7% year over year. Loss at Central and other operation grossed $7.6 million against $1 million in the year-ago quarter. VTR Chile revenues were $291.7 million, down 9.8% year over year. Corporate and other revenues totaled $94.3 million, up 1% year over year.
Recent Development
In Nov 2014, Liberty Global acquired full control of Ziggo N.V., the largest cable MSO in the Netherlands. To complete the takeover, the company vended its premium pay-TV channel “Film1”. Furthermore, Liberty Global has provided the assurance that it will not prevent online video streaming service providers such as Netflix Inc. (NFLX) from accessing its web (Internet) network either contractually or technically for eight years. In the Netherlands, Ziggo competes directly with Royal KPN N.V. and Vodafone Group Plc. (VOD). Liberty Global currently carries a Zacks Rank #2 (Buy).
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