Sky's Earnings Climb on Subscriber Growth in U.K., Germany

By Simon Zekaria

LONDON--Sky PLC's (SKY.LN) earnings climbed Tuesday as television subscriber growth and demand for new products in the U.K. and Germany pushed up revenue for the satellite broadcaster and pay-TV giant.

Sky, Europe's biggest pay-TV group by customer numbers, said operating profit before exceptional items--a key measurement of business performance--in the nine months ended March 31 rose 20% year-over-year to 1.03 billion pounds (($1.53 billion), compared with market expectations of GBP1.00 billion from a company-produced consensus forecast. It didn't disclose net profit.

Revenue rose 5% to GBP8.45 billion, compared with expectations of GBP8.44 billion. Revenue from operations in the U.K. and Ireland rose 6%. For Germany, it increased 9%, respectively. Revenue in Italy fell in a challenging economic environment, it said.

The U.K.'s market-leading pay-television operator said it added 242,000 new customers in the third quarter, up 70% year-over-year.

The number of products its existing customers use, including broadband and high-definition TV, jumped by more than one million, it said. That compares with a rise of 764,000 in the same period a year earlier.

In February, Sky more than doubled net profit under the first set of results for the expanded group. In July last year, it agreed to buy its sister companies in Germany and Italy from 21st Century Fox Inc. (FOXA) in a deal worth about $9 billion, creating a pan-European pay-TV giant with around 20 million customers across Germany, Italy, Austria, the U.K. and Ireland.

Sky is 39%-owned by 21st Century Fox, which until June 2013 was part of the same company as The Wall Street Journal parent News Corp. (NWS.AU).

Sky shares closed Monday at 1,052 pence, valuing the company at GBP18.08 billion.

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