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Liberty Global (LBTYA) Incurs Loss in Q1, Revenues Lag Y/Y

Zacks Equity Research

Liberty Global plc. LBTYA, a leading European quad-play cable MSO (multi service operator), reported disappointing financial results in the first quarter of 2017. The company reported net loss in contrast to the Zacks Consensus Estimate of net profit. 

GAAP net income in the first quarter was $293 million or a loss of 33 cents per share compared with a net loss of $369 million or a loss of 40 cents per share in the prior-year quarter. Quarterly net loss of 33 cents per share was in contrast to the Zacks Consensus Estimate of a net income of 28 cents per share.

Meanwhile, quarterly total revenue of $3,519 million was down 19.3 % year over year.

Total segment operating cash flow in the reported quarter was $1,604.7 million, down 19.5% year over year. Quarterly operating cash flow margin was 45.6% compared with 46.5% in the year-ago quarter.

In the first quarter of 2017, Liberty Global generated $902.8 million of cash from operations compared with $1,020.8 million in the year-ago quarter. Adjusted free cash flow, in the reported quarter was a negative $332.6 million compared with a negative $104.9 million in the prior-year quarter.

At the end of first-quarter 2017, Liberty Global had $2,109.6 million of cash and cash equivalents and $37,277.7 million of outstanding debt on its balance sheet compared with $3,400 million and $37,800 million, respectively, at the end of 2016.

Segment-wise Results

Within the European operations, revenues from Western Europe totaled $3,218.6 million, down 19.9% year over year. Revenues from Central and Eastern Europe came in at $271.3 million, up 2% year over year. Central and other revenues were $28.7 million. Corporate and other revenues totaled $0.4 million.

Subscriber Statistics

In the reported quarter, Liberty Global added a total of 244,300 RGUs, (revenue generating units) including net gains of 154,400 and 105,000 subscribers for broadband Internet and telephony services, respectively. However, the company lost 15,100 video customers. Nonetheless, it added 18,200 mobile customers including a net gain of 91,200 postpaid subscribers and a net loss of 73,000 prepaid subscribers. In the reported quarter, Liberty Global added a net of 259,000 customers for its flagship Horizon TV-platform, Yelo TV platform and TiVo Inc. TIVO developed TV-platform.


In 2017, Liberty Global expects growth in rebased operating cash flow in to improve to 6–7% from 4% last year and accelerate to 7–8% in 2018 and the years beyond. Adjusted free cash flow is forecast at $1.5 billion this year, down from $1.99 billion last year.

Liberty Global PLC Price, Consensus and EPS Surprise


Liberty Global PLC Price, Consensus and EPS Surprise | Liberty Global PLC Quote

Latest Development

The long-awaited proposed joint venture (JV) between the units of Liberty Global and Vodafone Group Plc. VOD to merge their Dutch operations finally materialized on Dec 31, 2016. Apart from the JV with Vodafone, the launch of DOCSIS 3.1 network services, the acquisition of UTV Ireland TV stations from ITV, the long-term agreement with Netfix Inc. NFLX and the takeover of Cable & Wireless are expected to drive growth in future. Liberty Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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