Another weak performer during the quarter—and the largest detractor from performance for the one-year period—was Sky Network Television (ASK:SKT). Sky is an entertainment provider and the dominant supplier of pay-television services in New Zealand. Earlier in the year, we reported that Sky’s stock price had been negatively impacted after its merger with Vodafone was terminated. During the most recent quarter, Sky released first-half results that were slightly below expectations due to a drop in subscribers. However, profitability remained in line with expectations because management took action to reduce costs. While Sky has been a detractor for the year, the business generates cash flow, and we receive a significant dividend from our investment. We continue to believe the management team is working to increase shareholder value by adapting to the competitive environment, investing in content and connectivity, improving the OTT offering, and planning important initiatives, including potentially tightening the company’s relationship with Vodafone.
From David Herro (Trades, Portfolio)'s Oakmark Small-Cap International Fund 3rd quarter 2017 commentary.
