Liberty Global Inc. (LBTYA) recently raised its share buy back program by an additional $212 million. This will increase the company’s total share repurchase program to approximately $1 billion, of which $787 million of shares are repurchased so far. Under the new repurchase program, Liberty Global will acquire Series A common stock, Series C common stock, or any combination of Series A and Series C common stock.
The company is aggressively buying back shares, a move that we think will provide downside cushion to EPS. We believe Liberty Global’s earnings will continue to benefit from the ‘triple play’ offerings of video, broadband and telephony, as it signs up more customers in Europe and Latin America. Acquisition in Germany will help the company to sustain long-run growth.
However, we remain concerned regarding the company’s Central & Eastern European operations. In the second quarter 2010, Liberty Global lost 108,000 video customers, mostly in these regions. In our opinion, Liberty Global will remain in losses throughout fiscal 2010.
Liberty Global is also suffering from severe foreign exchange rate fluctuations. In the second quarter 2010, Liberty Global incurred a whopping $758.3 million of foreign currency transaction losses. In addition, interest expense increased a massive 65% year over year. Liberty Global’s highly leveraged balance sheet may further increase interest charges going forward.
The company operates in 14 countries all outside of U.S. Continuing foreign currency rate volatility may further diminish the company’s earnings in the coming quarters.
Libert Global’s closest rivals are BT Group Plc. (BT), Eutelsat Communications, SES S.A. and CATV Systems.
We currently maintain our long-term Neutral recommendation on Liberty Global with a short- term Zacks Rank #3 (Hold).
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However, we remain concerned regarding the company’s Central & Eastern European operations. In the second quarter 2010, Liberty Global lost 108,000 video customers, mostly in these regions. In our opinion, Liberty Global will remain in losses throughout fiscal 2010.
Liberty Global is also suffering from severe foreign exchange rate fluctuations. In the second quarter 2010, Liberty Global incurred a whopping $758.3 million of foreign currency transaction losses. In addition, interest expense increased a massive 65% year over year. Liberty Global’s highly leveraged balance sheet may further increase interest charges going forward.
The company operates in 14 countries all outside of U.S. Continuing foreign currency rate volatility may further diminish the company’s earnings in the coming quarters.
Libert Global’s closest rivals are BT Group Plc. (BT), Eutelsat Communications, SES S.A. and CATV Systems.
We currently maintain our long-term Neutral recommendation on Liberty Global with a short- term Zacks Rank #3 (Hold).
LIBERTY GLBL-A (LBTYA): Free Stock Analysis Report
Zacks Investment Research
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