Sky Reports In-Line 9 Month Results

Sky reported solid nine-month results in line with analysts expectations, who consider the stocks to be fair valued

Allan C. Nichols, CFA 20 April, 2017 | 12:38PM

Sky (SKY) reported solid nine-month results in line with Morningstar equity analysts’ expectations, and we don’t expect to make any significant changes to our fair value estimate. Our narrow moat rating remains intact. Reported revenue grew 11% due to the strength of the euro versus the British pound.

Sky continues to do an excellent job of controlling costs

Underlying revenue grew 5%, versus our full year projection of 6.2%. While subscriber growth slowed in the fiscal third quarter in the UK to 40,000 net new customers, this is historically its slowest quarter. In Italy, the firm lost 7,000 subscribers due to a dispute with Telecom Italia and the weak economy. Growth was better in Germany at 73,000. Germany remains the fastest-growing segment, with revenue up 10% year over year. We expect this trend to continue.

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About Author

Allan C. Nichols, CFA  is a senior stock analyst and international investing specialist with Morningstar.

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