By Lilly Vitorovich
Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- Virgin Media Inc. (VMED) Thursday posted better-than-expected third quarter results on strong consumer demand for its Internet broadband, pay-television and mobile services, echoing rival British Sky Broadcasting PLC's (BSY) recent strong performance.
The cable-television and Internet provider, which operates solely in the U.K., said operating cash flow before exceptional items, the key figure tracked by U.K. analysts, rose 6.7% to GBP348 million in the third-quarter ended Sept. 30 from GBP326 million last year, ahead of market expectations of GBP335 million.
BSkyB last Friday reported that operating profit before exceptional items rose 8.8% to GBP198 million in the same quarter.
News Corp. (NWS), owner of this newswire, has a roughly 39% stake in BSkyB.
Virgin Media and BSkyB are each benefiting from strong consumer demand for home entertainment during the economic downturn. By spending more time at home, consumers are hoping to curb expenditure, although Sky recently said its customers are prepared to pay more for premium services such as high definition television.
Virgin Media said average revenue per user rose 5.3% to GBP44.24 from GBP42.00, while it added 199,900 net new revenue generation units in the quarter.
Chief Executive Neil Berkett said the group's focus remains "on attracting high value customers, who buy more from us and stay with us longer."
"This strategy has led to the second successive quarter of record ARPU and strong consumer revenue growth," he said in a statement.
Virgin Media shares closed at 845 pence Wednesday on the London Stock Exchange, valuing the company at GBP2.77 billion.
Virgin Media debuted on the London Stock Exchange at start of the month, in a move aimed at increasing its shareholder base and profile in the U.K. and continental Europe. The group's primary listing remains on the U.S. Nasdaq.
-By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; lilly.vitorovich@dowjones.com