Earnings Preview: 4 Key Things to Look Out for in StarHub Ltd

Shares of StarHub Ltd (SGX: CC3) took a beating in 2016.

There have been some challenges for the company. For the first nine months of 2016, StarHub’s services revenue slipped by 1% due to weakness in its Mobile and Pay TV segments. The telco’s net profit was also down by 1%. StarHub will wrap up 2016 with its next earnings report.

Here’re four key things investors might want to look out for.

1. Cash, cash, cash – click here

2. The fourth telco cometh – click here

3. Falling Pay TV subscribers

As mentioned earlier, StarHub’s Pay TV revenue is down. In the third quarter of 2016, the Pay TV segment’s sales declined by 3.6% year-on-year.

One reason behind this fall is the decline in StarHub’s Pay TV subscription base.

In the first quarter of 2016, the Pay TV segment recorded a loss of 8,000 subscribers. Then, the second quarter saw the subscriber count fall by another 10,000. In the third quarter, 11,000 subscribers left StarHub’s Pay TV service.

StarHub has seen its subscriber loss widen in each of the last three quarters. Investors may want to observe if the company is able to arrest a fall in Pay TV subscribers.

4. Dude, where’s my moat?

Along with the falling Pay TV subscribers, StarHub’s Hub Club membership is also experiencing declines.

StarHub’s chief executive Tan Tong Hai believes that the hubbing strategy is a key piece of the company’s plan to protect its business. But, Hub Club memberships started declining in the first quarter of 2016. The losses continued into the second and third quarter of the year. If StarHub’s not able to hold its subscriber base together, there might be more questions from analysts on the loss of Hub Club members.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.