Liberty Global Sales Beat Estimates on New Customers in Europeby
Sales rose 2.2%, analysts anticipated a small decline
Liberty Global turns toward expansion in Latin America
Liberty Global Plc reported a surprising rise in third-quarter revenue, driven by growth in the U.K. and Germany, as billionaire chairman John Malone’s strategy to consolidate the European cable market paid off.
Sales rose 2.2 percent to $4.6 billion from a year earlier, the London-based company said Thursday in a statement. Analysts had predicted revenue would slightly decline to $4.47 billion on average, according to data compiled by Bloomberg. Liberty Global said it had record customer growth in the U.K. of 42,000 in the quarter and another 14,000 in Germany, bringing the company’s total customer base to 25.8 million.
Liberty Global has been seeking growth from broadband subscriptions as streaming and on-demand TV services edge out traditional TV viewing. The company, which called off formal talks for an asset-swap with Vodafone Group Plc in September, is looking for ways to expand in Latin America and said last month it was in talks to buy Cable & Wireless Communications Plc to increase its reach in the Caribbean.
Still, Liberty Global lost 18,000 subscribers in the Netherlands and said the fourth quarter for its Dutch business Ziggo would remain challenging. Ziggo lost 87,000 subscribers in the second quarter. Liberty Global, which bought Ziggo last year for 4.9 billion euros ($5.3 billion) has been losing Internet and cable customers to rival Royal KPN NV, which added 33,000 broadband and 55,000 IPTV subscribers in the quarter.
Liberty Global has also invested in TV-show production and mobile-phone services as new sources of revenue after spending more than $50 billion consolidating cable operations in from Hungary to Germany to the U.K. over the past decade.
Talks over a potential cash-and-stock deal with Cable & Wireless may also precede a spinoff of Liberty Global’s Latin America unit, people familiar with the plan have said. In July, Liberty Global created a tracking stock called LiLAC for its existing assets in Latin America and the Caribbean that gives Malone a new balance sheet from which to start consolidating local assets, analysts have said.
Liberty Global currently has operations in the Americas in countries such as Chile and in Puerto Rico, which accounted for less than 7 percent of revenue last year. For the third quarter, revenue at LiLAC operations increased 3 percent to $309 million, the company said.
News of talks with Cable & Wireless have also extinguished last hopes Malone would find common ground for a combination of sorts with Vodafone. While the billionaire had maintained Vodafone’s assets in Europe would be attractive, he’s said the two companies have different corporate cultures that would make a combination difficult.