Liberty Global’s LBTYA shares dipped 3%, at close, after the third quarter of 2024 earnings release on Oct. 30. 

LBTYA has gained 12.6% year to date (YTD), underperforming the Zacks Computer and Technology sector, the Zacks Wireless National industry and the S&P 500 index’s return of 27.6%, 26.1% and 22.5%, respectively. 

LBTYA's loss from continuing operations in the third quarter of 2024 amounted to $1.4 billion against a profit of $822 million in the year-ago quarter.

Revenues increased 1.4% year over year to $1.935 billion. On a rebased basis, revenues rose 2.6% year over year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Top-Line Details

Total average revenue per unit (ARPU) per fixed customer relationship increased 0.5% year over year to $67.89. On a rebased basis, the figure declined 0.9%.

Mobile ARPU (including interconnect revenues), on a reported basis, increased 3% to $27.62. On a rebased basis, the figure dropped 3.9%. Mobile ARPU (excluding interconnect revenues), on a reported basis, increased 2.9% to $25.75.

As of Sept. 30, 2024, the total mobile subscriber count included approximately 2.9 million subscribers in Switzerland, 2.89 million in Belgium, 35 million from the VMO2 Joint Venture (JV) and 5.5 million from the VodafoneZiggo JV.

In total, Liberty Global lost 12,200 customer relationships in the second quarter compared with a loss of 39,100 in the year-ago quarter.

On a reported basis, Belgium's revenues increased 1.3% year over year to $785.2 million.

In Belgium, Liberty Global lost 8,300 customer relationships compared with a loss of 21,100 in the year-ago quarter.

Switzerland’s revenues, on a reported basis, increased 0.7% year-over-year to $865.7 million.

In Switzerland, LBTYA lost 600 customer relationships against a loss of 11,100 in the year-ago quarter.

On a reported basis, Ireland's revenues declined 4.5% to $119.8 million.

The company lost 2,200 customer relationships in Ireland compared with a loss of 5,100 in the year-ago quarter.

Central and other revenues, on a reported basis, climbed 39.6% to $229.3 million.

In Slovakia, Liberty Global lost 1,100 customer relationships compared with a loss of 1,800 in the year-ago quarter.

Joint Venture Details

Sunrise revenues of $865.7 million in the third quarter of 2024 increased 0.7% year over year on a reported basis and decreased 1.3% on a rebased basis. The rebased decrease was mainly due to continuous right pricing efforts and a reduction in mobile roaming revenues, partially balanced by B2B momentum and growth in flanker brands.

Telenet revenues of $785.2 million increased 1.3% year over year on a reported basis and 0.3% on a rebased basis. The rebased increase was primarily due to the recognition of previously deferred revenues amounting to $18 million, partially offset by a fall in B2B wholesale revenues following the expected loss of the VOO MVNO contract and a decline in mobile revenues because of lower interconnect revenues and handset sales.

Liberty Global’s non-consolidated joint venture, Virgin Media O2, reported revenues of $3.512 billion, which increased 0.3% year over year on a reported basis and decreased 2.4% on a rebased basis. The rebased decrease was primarily due to a fall in mobile revenues because of lower handset sales and a change in third-party supplier contracts.

The fixed customer base increased by 15,000 in the reported quarter, primarily due to an increase in gross adds and an expansion in customer activity in nexfibre areas. 

VodafoneZiggo revenues rose 0.5% on a reported basis and decreased 0.5% on a rebased basis to $1.131 billion. The rebased decrease was primarily driven by a decline in the business-to-consumer fixed customer base partially offset by continued growth in mobile and B2B fixed revenues.

FMC penetration remained stable at 49% year over year. 

Mobile postpaid net adds increased by 2,300, alongside mobile and fixed ARPU growth in the quarter, supported by the price indexation implemented in October. The broadband base contracted by 20,400 in the quarter, as a decline of 25,500 in consumers was partially offset by an increase of 5,100 in B2B.

Operating Details

Adjusted EBITDA increased 11.8% year over year to $668.3 million in the second quarter. On a rebased basis, EBITDA increased 9.4%.

Switzerland’s EBITDA, on a rebased basis, increased 0.3% from the year-ago quarter.

Belgium’s EBITDA, on a rebased basis, increased 5.2% year over year.

Ireland’s EBITDA, on a rebased basis, declined 10.7% year over year.

The company reported an operating income of $101.3 million in the reported quarter against an operating loss of $27.4 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Sept. 30, 2024, Liberty Global had $5 billion in cash, investments under SMAs, and unused borrowing capacity, including $1.5 billion in corporate cash and no material debt maturities until 2030. This compares with $5 billion of cash, investments under SMAs and unused borrowing capacity in the previous quarter.

In the third quarter, the total principal amount of debt and finance leases was $16 billion for continuing operations compared with $15.6 billion in the previous quarter. The average debt tenor is 4.1 years, with approximately 10% not due until 2030 or later.

Cash provided by operating activities was $449.5 million, up 37.4% year over year.
The adjusted free cash flow was $91.1 million in the third quarter against the adjusted free cash flow of $258.5 million in the previous quarter. The negative adjusted free cash flow in the year-ago quarter was $102.3 million.

Zacks Rank & Stocks to Consider

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

Funko FNKO, Flutter Entertainment PLC FLUT and BlackLine BL are some better-ranked stocks that investors can consider in the Zacks Consumer Discretionary sector. FNKO, FLUT and BL sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Funko’s have gained 53.9% year to date. FNKO is set to report third-quarter 2024 results on Nov. 7.

Shares of Flutter Entertainment have jumped 18.8% year to date. FLUT is slated to report third-quarter 2024 results on Nov. 12.

Shares of BlackLine have declined 8.2% year to date. BL is set to report third-quarter 2024 results on Nov. 7.

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