- Share this article on Facebook
- Share this article on Twitter
- Share this article on Flipboard
- Share this article on Email
- Show additional share options
- Share this article on Linkedin
- Share this article on Pinit
- Share this article on Reddit
- Share this article on Tumblr
- Share this article on Whatsapp
- Share this article on Print
- Share this article on Comment
LONDON – John Malone‘s international cable giant Liberty Global swung to a second-quarter loss as expenses rose amid its recent acquisition of U.K. cable giant Virgin Media.
But the company continued to sign up new subscribers and grow revenue, beating Wall Street estimates. As was the case at the time the Virgin Media deal closed, the largest cable operator in Europe ended the second quarter with more video subscribers than U.S. cable giant Comcast.
PHOTOS: 10 Highly Paid Entertainment CEOs: How Much They Make
The company, which operates in 14 mostly European countries, posted a quarterly loss of $11.6 million, compared with a $702 million profit in the year-ago period.
Revenue rose 25 percent, or 6 percent on an adjusted basis, to $3.16 billion.
Virgin Media is Liberty Global’s biggest deal to date. But the company recently lost a bidding showdown for Kabel Deutschland, Germany’s largest cable operator, to telecom giant Vodafone. Liberty Global had hoped to further strengthen its operations in Germany.
Meanwhile, the company has increased its stake in Dutch cable operator Ziggo to 28.5 percent. Malone has also signaled an interest in cable acquisitions in Southern Europe once the economy starts to improve there.
Liberty Global added 229,000 new “revenue generating units” (RGUs), or total product subscriptions, when excluding the 23 days of ownership of Virgin Media in the quarter. That compared to 364,000 in the year-ago period. Including Virgin Media, the firm had total RGUs of 47.53 million as of mid-year, compared with the 52.09 million reported earlier this week by Comcast, the largest U.S. cable operator.
PHOTOS: 17 of Hollywood’s Biggest Philanthropists
The company ended June with around 21.88 million video subscribers. Comcast had reported nearly 21.78 million video customers.
“The highlight of our second quarter was the successful acquisition of Virgin Media,” said Liberty Global CEO Mike Fries. “This transaction marks an important milestone in our efforts to consolidate what remains a very fragmented European cable market. Virgin Media significantly enhances both the scale of our business and our levered equity growth strategy.”
Added Fries: “We are making significant progress integrating Virgin Media into our European operations.”
During a conference call, Fries was asked about talk that Virgin Media was in talks about offering telecom giant BT’s new sports channels similar to how it offers channels from BT competitor BSkyB. Said Fries: “BT Sport is a defensive move targeting Sky” and is “not so much about us,” with Virgin Media really “in the middle” of the showdown.
Asked about Liberty Global’s recent move to boost its stake in Dutch cable giant Ziggo, the CEO said it was part of a hedging structure on its existing stake, which allowed the firm to buy additional stock.
E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai
Related Stories
Related Stories
Related Stories
THR Newsletters
Sign up for THR news straight to your inbox every day