Liberty Global (LBTYA) Q1 Earnings Rise Y/Y, Revenues Fall

Liberty Global's LBTYA earnings from continuing operations in first-quarter 2022 amounted to $1.075 billion, up 24.4% year over year.

Revenues plunged 47% year over year to $1.85 billion. On a rebased basis, revenues increased 1.5% year over year.

The Zacks Consensus Estimate for earnings and revenues were pegged at a loss of 18 cents per share and $1.91 billion, respectively.

Liberty Global lost 3,900 customer relationships in the reported quarter versus 33,100 additions in the year-ago quarter.

Liberty Global PLC Price, Consensus and EPS Surprise

Liberty Global PLC price-consensus-eps-surprise-chart | Liberty Global PLC Quote

Top-Line Details

The average revenue per unit (“ARPU”) per cable customer relationship declined 4.2 % to $66.47.

Mobile ARPU (including interconnect revenues), on a reported basis, increased 9.1% to $6.81. On a rebased basis, the figure dropped 3.8%.

Mobile ARPU (excluding interconnect revenues), on a reported basis, rose 13.9% to $24.10. On a rebased basis, the figure was down 2.2%.

In Belgium, Liberty Global lost 5,500 customer relationships compared with a loss of 4,500 in the year-ago quarter.

Belgium revenues, on a reported basis, declined 6.3% year over year to $724.4 million. On a rebased basis, revenues inched up 0.7%.

In Switzerland, Liberty Global gained 5,400 customer relationships compared with the additions of 5,100 in the year-ago quarter.

Switzerland revenues, on a reported basis, declined 2.4% year over year to $821.4 million. On a rebased basis, revenues moved up 1%.

The company, in Ireland, lost 1,400 customer relationships against additions of 2,600 in the year-ago quarter.

Ireland revenues, on a reported basis, fell 6.1% to $127.8 million. On a rebased basis, the top line increased 0.9%.

In Slovakia, Liberty Global lost 2,400 customer relationships versus additions of 1,500 in the year-ago quarter.

Central and other revenues, on a reported basis, increased 50.8% to $181.4 million. On a rebased basis, the top line increased 8.9%.

Joint Venture Details

Liberty Global’s venture portfolio remained flat during the quarter and is currently valued at $3.4 billion. Key drivers for this sequential valuation decline is lower value of the company’s ITV stake and an overall relatively limited investment of approximately $80 million in the reported quarter.

Liberty Global’s non-consolidated joint venture — Virgin Media O2 — reported revenues of $3.4 billion, was broadly flat year over year on an FX neutral pro-forma basis, primarily driven by growth in mobile revenue, including a year over year increase in handset revenue.

Virgin Media O2 witnessed a strong demand for premium connectivity and broadband speed during the reported quarter, driven by an increase in fixed and mobile prices and continued investments. Postpaid mobile net additions were 11,000, while broadband net additions remained broadly flat with 1,000 net reductions in the reported quarter.

Vodafone Ziggo revenues declined 7.1% on a reported basis and increased 0.3% on a rebased basis, year over year, to $1.13 billion, driven by an increase in mobile customers, B2B fixed customer base growth, and fixed ARPU growth. The joint venture added 37,000 mobile postpaid subscribers.

Operating Details

Adjusted EBITDA declined 48% year over year to $684.3 million in the first quarter. On a rebased basis, EBITDA increased 2.6%.

Switzerland EBITDA, on a rebased basis, was up 9.6% from the year-ago quarter.

Belgium EBITDA, on a rebased basis, dropped 1.7% year over year.

Moreover, Ireland EBITDA, on a rebased basis, increased 14.9% year over year.

Operating income was $58.8 million in the reported quarter compared with $601.2 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Mar 31, 2022, Liberty Global had $4.7 billion of cash, investments under SMAs and unused borrowing capacity, compared to $5.3 billion in the previous quarter.

In the first quarter, the total principal amount of debt and finance leases was $14.7 billion for continuing operations compared with $14.9 billion in the previous quarter. The average debt tenor is seven years, with approximately 94% not due until 2028 or thereafter.

Cash provided by operating activities was $605.6 million, down 31.5% year over year.

Moreover, adjusted free cash flow was $137.2 million in the first quarter compared with free cash flow of $434 million in the previous quarter and $76.1 million in the year-ago quarter.

Zacks Rank and Stocks to Consider

Currently, Liberty Global carries a Zacks Rank #3 (Hold).

LBTYA shares are down 21.1% in the year-to-date period against the Zacks Cable Television industry’s plunge of 23.6% and the Consumer Discretionary sector’s fall of 32.1%.

Some better-ranked stocks from the Zacks Consumer Discretionary sector are Aaron’s AAN, Planet Fitness PLNT and SeaWorld Entertainment SEAS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Aaron’s shares are down 21.5% in the year-to-date period against the Zacks Consumer Services - Miscellaneous industry’s decline of 18.5% and the Consumer Discretionary sector’s fall of 32.1%.

Planet Fitness shares are down 25.2% in the year-to-date period against the Zacks Leisure and Recreation Services industry’s decline of 30% and the Consumer Discretionary sector’s fall of 32.1%.

SeaWorld Entertainment shares are down 13.1% in the year-to-date period against the Zacks Leisure and Recreation Services industry’s decline of 30% and the Consumer Discretionary sector’s fall of 32.1%.

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