Europe's steady economic improvement continues to be a tailwind for Liberty Global plc (NASDAQ:LBTYK) and some of the company's new products are taking hold as well.

As the telecommunications business evolves, Liberty Global is quickly making strategic changes to its business. Here's a look at how the second quarter went and how some of those strategy moves are paying off.

4k TV on a small stand.

Image source: Getty Images.

Liberty Global plc: The raw numbers

Metric Q2 2017 Q2 2016 Year-Over-Year Change
Sales $3.66 billion  $4.47 billion  (18.1%) 
Operating cash flow $1.73 billion  $2.07 billion  (16.5%) 
Free cash flow $325.1 million  $516.4 million  (37%) 

Data Source: Liberty Global earnings release. Includes only European operations.

What happened with Liberty Global plc this quarter?

The top-line numbers are helpful, but with a number of distinct businesses making up Liberty Global it's important to understand some of the segment.

  • The revenue and earnings decline you see above was due to the deconsolidation of the Netherlands operations, which is now a joint venture with Vodafone Group plc. Rebased revenue growth was 2% for the quarter.
  • 162,000 revenue generating units (RGUs) were added in the quarter and 406,000 have been added so far in 2017.
  • U.K. demand is strong as the company rolls out its 4K-enabled, Virgin TV V6 set-top boxes. RGUs in the U.K. and Ireland were up 78,100 in the quarter, leading all countries.
  • Germany was the other strong country with 53,800 RGUs added in the quarter. 
  • Liberty Global continues to lose video customers, which dropped 16,100 in the quarter, but makes up for those losses with data and voice additions, which were up 100,100 and 77,900 respectively.
  • The company has refinanced $11 billion of debt in the first half of the year and now has an average interest rate of 4.8% with a tenor of seven years.

What management had to say

Management was happy with performance in Europe and the long-term strategy to offer improved quality video and cellular products with more compelling packages is working. CEO Mike Fries said:

Our next-generation4 video platforms, which include elegant user-interfaces, in-and-out of the home viewing capabilities and robust content line-ups, continue resonating with consumers, as we've added 1 million subscribers across Europe during the last twelve months.

Looking forward

Investments in broadband and cellular networks in Europe are paying off and that momentum will continue throughout the year. What investors will want to watch for is if 4k video is a product customers are willing to trade up for rather than cutting the cable cord altogether. If adoption rates rise, this is a product that could drive growth and stem some of the losses Liberty Global has seen in recent years.

Investors should also look for the spinoff of LiLAC Group later this year, which could free up some capital to pay down debt or buy back shares. And simplifying the corporate structure would be a welcome change as well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.