Sky Reports Earnings Up, Beats Forecasts

Pan-European pay TV giant Sky, in which Rupert Murdoch’s 21st Century Fox owns a 39% stake, announced better than expected earnings for its first fiscal quarter on Wednesday, buoyed by the results of the merger of the company’s UK, German and Italian operations. Sky, Europe’s biggest pay TV operator in terms of subscribers, said operating profit before exceptional items on a constant currency basis- one regularly used measurement of Sky’s main business performance- rose 10% year-over-year in the three months ended Sept. 30 to $579 million, higher than an expected market forecast of $565 million. Net profits were not disclosed Revenue rose 6% to $4.3 billion, in line with forecasts.

The company added 134,000 new customers in the latest quarter, up 7% from a year-ago period. In the U.K. and Ireland particularly, growth was it its highest in four years, adding 77,000 new customers, including 43,000 new TV subscribers. In Germany and Austria, Sky added 94,000 customers, but lost 37,000 customers in Italy.

As of September, Sky has a total of 25.34 million customers, with almost half of that coming from the UK and Ireland (12.08 million), with 4.69 million in Italy and 4.37 million Sky Deutschland retail customers in Germany.

“”Our investments in content are driving a great performance on screen, with highlights this quarter, including record viewing of Sky Atlantic in the U.K., of the Bundesliga in Germany and the X Factor in Italy,” said Sky chief exec Jeremy Darroch. “We are building scale in our own world class original content, as well as securing key rights including multi-year deals with Disney and SANZAR southern hemisphere rugby.”

Sky shares were trading up by more than 3% at £1106 a share by midday UK time.

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