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Why Is Liberty Global PLC (LBTYA) Down 5.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for Liberty Global PLC (LBTYA - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Liberty Global PLC due for a breakout? 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 and Revenues Rise Y/Y

Liberty Global’s first-quarter 2021 net income was $1.44 billion, up 41.5% year over year.

Revenues increased 25.7% year over year to $3.62 billion. However, on a rebased basis, revenues inched up 0.2% year over year.

Liberty Global gained 38,000 customer relationships in the reported quarter against a loss of 18,900 in the year-ago quarter.

Fixed-mobile convergence penetration increased to 29% in the first quarter, up from 23% in the year-ago quarter.

Markedly, Liberty Global’s U.K. joint venture with Telefonica's O2 is set to close in June, subject to final approval by the regulators.

Top-Line Details

Average revenue per unit (“ARPU”) per cable customer relationship increased 6% to $63.16. On a rebased basis, the figure declined 5.4%.

Mobile ARPU (including interconnect revenues), on a reported basis, increased 36.7% to $22.89. On a rebased basis, the figure decreased 4.5%.

Further, mobile ARPU (excluding interconnect revenues), on a reported basis, surged 44.6% to $19.87. On a rebased basis, the figure was down 4.8%.

In the United Kingdom/Ireland, Virgin Media gained 31,000 customer relationships against a loss of 1,000 in the year-ago quarter. The company benefited from strong demand for broadband bundles. Liberty added 24,000 customers in its Lightning footprint and 7,000 in BAU footprint.

The U.K./Ireland revenues, on a reported basis, climbed 9.3% year over year to $1.77 billion. On a rebased basis, the same increased 1.4% year over year.

In Belgium, Telenet lost 4,500 customer relationships compared with loss of 7,500 in the year-ago quarter.

Belgium revenues, on a reported basis, increased 7.6% year over year to $772.7 million. On a rebased basis, revenues fell 1.3%.

In Switzerland, Liberty Global gained 4,400 customer relationships compared with the loss of 16,400 in the year-ago quarter. Sunrise added 4,000 customers in the period.

Switzerland revenues, on a reported basis, surged 165.7% year over year to $841.8 million. On a rebased basis, revenues decreased 0.3%.

Continuing CEE (Poland and Slovakia) gained 7,100 customer relationships compared with 6,100 in the year-ago quarter, driven by growth in new build areas.

Continuing CEE revenues, on a reported basis, increased 8% to $128.6 million. On a rebased basis, the top line increased 3.2%.

Revenues from the Dutch joint venture increased 1.8% year over year on a rebased basis.

Liberty Global built 113,000 new premises in the reported quarter including 80,000 in the U.K. & Ireland.

Operating Details

Adjusted EBITDA increased 18.9% year over year to $1.37 billion in the first quarter. On a rebased basis, EBITDA decreased 1.7%.

U.K./Ireland EBITDA, on a rebased basis, decreased 1.9% year over year. Switzerland EBITDA, on a rebased basis, was down 7.3% from the year-ago quarter.

Belgium EBITDA, on a rebased basis, increased 3.2% year over year. Moreover, CEE EBITDA, on a rebased basis, increased 0.3% year over year.

Operating income was $625.3 million in the reported quarter compared with $280.6 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Mar 31, 2021, Liberty Global had $5.8 billion of cash, investments under SMAs and unused borrowing capacity.

Total principal amount of debt and finance leases were $30.9 billion for continuing operations. Moreover, the average debt tenor is seven years, with approximately 82% not due until 2027 or thereafter.

As of Mar 31, 2021, Liberty Global’s adjusted gross and net leverage ratios were 5.6X and 5.1X, respectively.

Cash provided by operating activities was $821.2million, up 82.6% year over year.

Moreover, adjusted free cash flow was $93.1 million in the first quarter against free cash outflow of $317 million in the year-ago quarter.

The company bought back $447million of shares through the end of April.

Guidance

For 2021, Liberty Global expects adjusted free cash flow of $1.35 billion.

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.


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