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BSkyB Q1 profits up despitte slowdown in TV subscriptions
LONDON (AP) ' British Sky Broadcasting PLC, in which Rupert Murdoch's News Corp. has a large minority stake, saw its first quarter profits rise further as increasing sales of telephone and broadband packages offset a slowdown in new television subscriptions
The company said Wednesday that profit on continuing operations in the three months to end-September rose by 24 percent to 225 million pounds ($355 million) from 182 million pounds a year ago. Revenue increased 8.5 percent to 1.66 billion pounds as customers rose by 4 percent to 10.4 million.
BSkyB shares rose 2.9 percent at 695 pence on the London Stock Exchange.
"Against a grim economic backdrop, these are very good figures," said Steve Malcolm, analyst at Evolution Securities, who rates the shares as "buy."
BSkyB said 28 percent of its customers have signed up to its triple play of TV, broadband and telephone services, up from 23 percent a year ago.
Earlier this year, News Corp. had to ditch its bid to take full control of BSkyB in the wake of the phone hacking scandal at its Sunday tabloid, the News of the World.
BSkyB said it benefited by collecting a break fee of a 39 million million pounds from News Corp.
Revenue was also boosted by 77 million pounds of sales of set-top boxes to Sky Italia, up from 48 million pounds a year ago.
The report noted a decision by the European Court of Justice which found in favor of a British pub landlord who used a foreign decoder rather than one provided by Sky. The company did not comment on the potential impact on its earnings, but said it remains to be seen how U.K. courts will apply the judgment.
BSkyB also expects to benefit by adding Formula 1 auto racing to its program package. The British Broadcasting Corp., which had exclusive rights to show Formula 1 but is under pressure to cut costs, agreed to a deal in which it continues to broadcast half of the races including the season finale while BSkyB gained rights to show all of them.