On Apr 16, 2014, we issued an updated research report on
Liberty Global plc
Except for the last quarter, Liberty Global has delivered
negative earnings surprise in all the three quarters last year,
with an average beat of negative 63.53%. The company reported
mixed financial results for the fourth quarter of fiscal 2013
with the bottom line beating the Zacks Consensus Estimate but the
top line missing the same.
In the coming years, we expect Liberty Global's revenues to
benefit from a 'triple play' of video, broadband, and telephone
offering, as it signs up more "bundled" customers in Europe and
Latin America. At the end of the fourth quarter of 2013, Liberty
Global had approximately 2 million
) platform-based video subscribers with a quarterly net addition
of 200,000 subscribers.
In Jun 2013, Liberty Global completed the full acquisition of the
British cable MSO, Virgin Media. The takeover places Liberty
Global as the largest cable TV MSO (multi service operator) in
the world. In the U.K., the merged entity poses serious
competitive threat to British Sky Broadcasting Group plc and
BT Group plc.
Notably, Virgin Media decided to offer the video-subscription
service of the online video streaming service provider
). With this, web-based services will be integrated into the
cable system for the first time in the global pay-TV industry.
Additonally, the board of directors of Liberty Global decided to
authorize a $4.5 billion share buy-back program over the next two
The company is predominantly operating in Europe, which is
currently the most vulnerable region economically. Ongoing debt
crisis in several European countries may significantly affect the
future prospects of Liberty Global. The company is gradually
shifting focus to western Europe and some Latin American
However, recessionary pressure is most severe in these
regions. A low per capita income may stall people from spending
more on exorbitant high-speed bundled communication services and
HD-DVR-based digital video services.
BT GRP PLC-ADR (BT): Free Stock Analysis
LIBERTY GLBL-A (LBTYA): Free Stock Analysis
NETFLIX INC (NFLX): Free Stock Analysis
TIVO INC (TIVO): Free Stock Analysis Report
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Liberty Global is currently trading at significantly higher
multiples with respect to several valuation metrics compared with
the industry average and the S&P 500. We believe that this
high level of valuation may restrict above-market gain anytime
Liberty Global currently has a Zacks Rank #3 (Hold).