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Liberty Global's (NASDAQ:LBTYK) cable and telephone business may be at something of a standstill in 2016, but that hasn't stopped the company from posting solid growth numbers. Demand for cable internet is growing around the world, and even an uncertain economic picture in Europe didn't slow the company down. In fact, subscriber additions are accelerating at the moment.

Here's what you should know about the recently reported second quarter. 

Liberty Global results: The raw numbers


Q2 2016 Actuals

Q2 2015 Actuals

Growth (YoY)


$5.07 billion

$4.57 billion


Operating Cash Flow

$2.31 billion

$2.29 billion


Free Cash Flow

$481.1 million

$592.3 million


Source: Liberty Global earnings release.

What happened with Liberty Global this quarter?

European operations continue to grow steadily, despite some economic turmoil in the region. Currency hedges have kept Brexit from being a meaningful negative for financials so far, although that could be a drag as the year goes on. Here are a few highlights from the quarter:

  • Second-quarter organic revenue-generating units (RGUs) were up 277,000, more than double the growth of 138,000 a year ago. First-half RGU additions of 433,000 have been driven by a 369,000 RGU increase in broadband internet.
  • Rebased revenue has grown 3% year to date, and operating cash flow is up 2% on the same basis.
  • Management is on pace to build or upgrade 1.5 million homes in 2016. This should help drive both RGU growth, as well as the long-term value the company can provide to customers demanding faster internet.
  • Liberty Global repurchased nearly $700 million of equity in the second quarter.
  • The European Commission has given Phase 1 clearance for a joint venture between Liberty Global and Vodafone in the Netherlands. This is expected to provide a better product offering and cost synergies for both companies in the country.

What management had to say

Solid subscriber and revenue growth was slightly overshadowed on the cash-flow side by investments in infrastructure and debt repayments in the quarter. But given the company's growth, that's a good use of capital. Management is looking to use the solid business position to accelerate share repurchases, and anticipates spending another $3.0 billion by the end of 2017.

Looking forward

European operations continue to be slow and steady cash generators. And the movement of customers to broadband internet should be a tailwind that will help the company for many years to come. Given the stickiness of the mobile and broadband businesses, investors should expect solid cash generation going forward, as well.

Management is sticking to its operating cash-flow growth goal of 7%-9% from 2015 to 2018. On a constant-currency basis, that's a target it should be able to hit long term. 

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