BSkyB beats first-half profit forecasts on strong product growth

LONDON, Jan 30 (Reuters) - BSkyB BSY.L posted better-than-expected first-half operating profit after the British pay-TV operator sold an increasing number of HD TV services, more on-demand movies and box-sets at Christmas, in part offsetting higher sports rights costs.

The company reported operating profit of 595 million pounds ($985 million), down 8 percent, on revenue up 7.6 percent to 3.75 billion pounds for the six months to end-December on Thursday.

Profit at Britain's dominant pay-TV provider is being squeezed by higher costs for sports rights and marketing as it fends off more aggressive competition from BT BT.L and TalkTalk .

Analysts were expecting operating profit of 586 million pounds on revenue of 3.76 billion pounds, according to a company-supplied consensus of eight analysts.

($1 = 0.6041 British pounds)

(Reporting by Paul Sandle; editing by Kate Holton)

((paul.sandle@thomsonreuters.com)(+44 20 7542 6843)(Reuters Messaging: paul.sandle.thomsonreuters.com@reuters.net))

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