It has been about a month since the last earnings report for Liberty Global PLC (LBTYA Quick QuoteLBTYA - Free Report) . Shares have lost about 2.8% 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 Decline Y/Y

Liberty Global's loss from continuing operations in first-quarter 2023 amounted to $713.5 million, down 166.3% year over year.

Revenues declined 0.8% year over year to $1.86 billion. On a rebased basis, revenues declined 1.7% year over year.

The Zacks Consensus Estimate for the bottom line was pegged at a loss of 16 cents per share while that for the top line was $1.81 billion.

Top-Line Details

The average revenue per unit (ARPU) per cable customer relationship declined 4% to $63.80.

Mobile ARPU (including interconnect revenues), on a reported basis, decreased 3.4% to $25.91. On a rebased basis, the figure dropped 1.6%.

Mobile ARPU (excluding interconnect revenues), on a reported basis, decreased 1.7% to $23.68.

As of Mar 31, 2023, the mobile subscriber count included approximately 428,300 subscribers in Switzerland, 260,600 subscribers in Belgium, 7,814,200 subscribers from the VMO2 JV and 364,100 prepaid mobile subscribers from the VodafoneZiggo JV.

In total, Liberty Global lost 16,500 customer relationships in the first quarter compared with a loss of 3,900 in the year-ago quarter.

In Belgium, Liberty Global lost 13,300 customer relationships compared with a loss of 5,500 in the year-ago quarter.

Belgium’s revenues, on a reported basis, increased 4.2% year over year to $754.5 million. On a rebased basis, revenues inched up 2.9%.

In Switzerland, Liberty Global added 2,300 customer relationships compared with the gain of 5,400 in the year-ago quarter.

Switzerland’s revenues, on a reported basis, declined 1.7% year over year to $807.4 million. On a rebased basis, revenues decreased 1.7%.

The company lost 2,500 customer relationships in Ireland compared with a loss of 1,400 in the year-ago quarter.

Ireland’s revenues, on a reported basis, fell 3.8% to $123 million.

In Slovakia, Liberty Global lost 1,200 customer relationships compared with a loss of 2,400 in the year-ago quarter.

Central and other revenues, on a reported basis, increased 1.3% to $244.5 million. On a rebased basis, the top line increased 5.7%.

Joint Venture Details

Sunrise revenues of $803.6 million in first-quarter 2023 decreased 2.5% year over year on a reported basis and 2.2% on a rebased basis. The decline was largely because of a decrease in fixed subscription revenues due to ARPU pressure on main brand offerings and low-margin business wholesale revenues. In the first quarter, Sunrise achieved 36,100 mobile postpaid net adds, driven by the Sunrise Up and yallo propositions and 7,200 broadband net adds, demonstrating positive acquisition activity through promotional periods and strong contributions from yallo offerings.

Telenet revenues of $754.5 million in first-quarter 2023 increased 4.2% year over year on a reported basis and 2.9% on a rebased basis. The increase in rebased revenues was primarily driven by higher advertising and production revenues, an improvement in business-to-business (B2B) revenues and higher subscription revenues.

Liberty Global’s non-consolidated joint venture — Virgin Media O2 — reported revenues of $3,162.7 million in first-quarter 2023, which decreased 6.9% year over year on a reported basis and 0.1% on a rebased basis. This decline was due to an increase in mobile revenues driven by higher handset revenues, a decrease in consumer fixed revenues and B2B fixed revenues. Demand for fast and high-quality broadband continued with broadband net adds of 28,800, while the average download speed across its broadband base increased 36% year over year to 315 Mbps, approximately 5x higher than the national average.

Vodafone Ziggo revenues declined 4.1% on a reported basis and increased 0.3% on a rebased basis to $1,083.4 million in the first quarter. The rebased increase was primarily driven by mobile growth that more than offset the effect of a lower business-to-consumer customer base.

Operating Details

Adjusted EBITDA declined 8.7% year over year to $624.5 million in the first quarter. On a rebased basis, EBITDA decreased 6%.

Switzerland’s EBITDA, on a rebased basis, declined 9.2% from the year-ago quarter.

Belgium’s EBITDA, on a rebased basis, increased 4% year over year.

Ireland’s EBITDA, on a rebased basis, decreased 8% year over year.

Operating income was $37.4 million in the reported quarter compared with operating income
of $58.8 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of Mar 31, 2023, Liberty Global had $5.3 billion of cash, investments under SMAs and unused borrowing capacity compared with $6.046 billion in the previous quarter.

In the first quarter, the total principal amount of debt and finance leases was $15.2 billion for continuing operations compared with $13.8 billion in the previous quarter. The average debt tenor is six years, with approximately 93% not due until 2028 or later.

Cash provided by operating activities was $307.8 million, down 53.12% year over year.

Moreover, adjusted free cash flow was negative $178.4 million in the first quarter compared with a free cash flow of $439.1 million in the previous quarter and $137.2 million in the year-ago quarter

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -68.29% due to these changes.

VGM Scores

Currently, Liberty Global PLC has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, 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 is part of the Zacks Cable Television industry. Over the past month, Dish Network , a stock from the same industry, has gained 23.8%. The company reported its results for the quarter ended March 2023 more than a month ago.

Dish reported revenues of $3.96 billion in the last reported quarter, representing a year-over-year change of -8.6%. EPS of $0.35 for the same period compares with $0.68 a year ago.

For the current quarter, Dish is expected to post earnings of $0.30 per share, indicating a change of -63.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.7% over the last 30 days.

Dish 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.