It has been about a month since the last earnings report for Liberty Global PLC (LBTYA). Shares have added about 8.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Liberty Global PLC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Liberty Global Q1 Earnings Rise Y/Y, Revenues Fall
Liberty Global's 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.
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.
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.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Currently, Liberty Global PLC has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Liberty Global PLC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Liberty Global PLC belongs to the Zacks Cable Television industry. Another stock from the same industry, Comcast (CMCSA), has gained 7.5% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.
Comcast reported revenues of $31.01 billion in the last reported quarter, representing a year-over-year change of +14%. EPS of $0.86 for the same period compares with $0.76 a year ago.
For the current quarter, Comcast is expected to post earnings of $0.91 per share, indicating a change of +8.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
Comcast has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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