Lehman Brothers has upgraded its earnings forecast for BSkyB in anticipation of a good set of first-half results next month. Analysts are particularly impressed by recent take-up of Sky’s PVR box, Sky+, and expect the company to announce an additional 90,000 subscriptions to the service in its first-half results on 11th February. The increase in PVR subs follows a recent £20 million marketing push.
The broker believes that BSkyB’s target of 315,000 Sky+ subs by the end of June 2004 is more than achievable at the current rate of uptake, which has exceeded expectations.
Lehman Brothers expects the satellite broadcaster to report subscribers up 195,000 to top 7.2 million and has raised its full-year earnings forecast by 5% to £578 million. It now expects the company to grow by 13.1% during 2004, compared to its previous forecast of 11.9%.
Merrill Lynch is also optimistic about BSkyB’s first-half results, which it believes will underline ‘continuing operational momentum’. It forecasts additional subscriptions of 180,000 and says that Sky+ targets are looking conservative in the light of recent levels of take-up.
Merrill expects average revenue per user to fall slightly following the removal of the £10 per month subscription charge for Sky+ if more than one premium channel is taken. Sky’s recent price rises will not take effect until next quarter.
