Liberty Global (LBTYA) Stock Rises Ahead of Earnings Release

Liberty Global (LBTYA) shares are gaining ahead of the company's third quarter 2015 earnings results due out today after the closing bell.
By U-Jin Lee ,

NEW YORK (TheStreet) -- Liberty Global (LBTYA) - Get Report  shares are gaining 0.09% to $45.81 ahead of the company's third quarter 2015 earnings results due out today after the closing bell. 

Profit is expected to decline year-over-year- but revenue is expected to rise. 

For the latest quarter, analysts are expecting the company to earn 5 cents a share on revenue of $4.55 billion.

In that same period the year before, the company earned 20 cents a share on revenue of $4.5 billion.

Its financial performance may be helped by strong demand for its digital cable-TV services. Still, some risks include growing competition and mounting programming expenses, according to Zacks Equity Research.

Based in London, Liberty Global provides video, broadband Internet, fixed-line telephony, and mobile services in Europe, Chile, Puerto Rico, and internationally.

Separately, TheStreet Ratings team rates LIBERTY GLOBAL PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate LIBERTY GLOBAL PLC (LBTYA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins, increase in stock price during the past year and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for LIBERTY GLOBAL PLC is rather high; currently it is at 63.55%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -10.17% is in-line with the industry average.
  • After a year of stock price fluctuations, the net result is that LBTYA's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The debt-to-equity ratio is very high at 3.55 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.27, which clearly demonstrates the inability to cover short-term cash needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 86.0% when compared to the same quarter one year ago, falling from -$249.90 million to -$464.70 million.
  • You can view the full analysis from the report here: LBTYA
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