UPDATE:Liberty Media's Operating Income Rises As QVC Improves
07 Agosto 2009 - 1:14PM
Dow Jones News
Liberty Media Corp. showed improved second-quarter operating
results across its three portfolios of media and ecommerce
businesses on Friday, with results at its struggling home-shopping
network, QVC, posting a smaller drop in revenue than it did the
past few quarters.
Its Starz Entertainment business continued to post strong
results, but its subscriber count fell 3% from the first quarter,
which the company said was partly a result of the weak economy.
Liberty, which is controlled by media mogul John Malone, didn't
repurchase shares in any of its three business units, each with
their own tracking stock.
Shares of Liberty Interactive (LINTA LINTB), which track QVC,
rose 15.8% to $8.59 on hopes that the home shopping network is
feeling the beginning of an economic recovery.
While Liberty doesn't report consolidated net income for the
entire company, the company said its overall operating income,
excluding depreciation and amortization, rose 17% to $505
million.
By that same measure, Liberty Interactive - which also tracks
Backcountry.com, Bodybuilding.com and its holdings in
IAC/InterActive Corp. (IACI), Ticketmaster Entertainment Inc.
(TKTM) and Expedia Inc. (EXPE) - posted a slight increase to $412
million. Revenue decreased 1% to $1.9 billion.
Liberty Entertainment (LMDIA LMDIB) - which tracks Starz
Entertainment, Liberty Sports Group and its majority holdings in
DirecTV Group Inc. (DTV) - posted a 44% increase in operating
income before depreciation and amortization to $89 million. Revenue
gained 2% to $367 million.
Shares of Liberty Entertainment added 15 cents to $27.48.
Liberty Capital (LCAPA LCAPB) - which tracks Starz Media,
TruePosition, the Atlanta Braves baseball team and holdings in
Sirius XM Radio Inc. (SIRI), Time Warner Inc. (TWX), Time Warner
Cable Inc. (TWC) and Sprint Nextel Corp. (S) - posted operating
income before depreciation and amortization of $4 million,
reversing a loss of $40 million in the year-ago period. Revenue
rose 14% to $199 million.
Shares of Liberty Capital added 4.6% to $16.85.
President and Chief Executive Greg Maffei said QVC, Liberty's
largest business, which has been struggling with a slowdown in
consumer spending, posted an "improved financial performance." Its
second-quarter revenue fell 4.4% to $1.68 billion, including a 2%
drop in the U.S. Excluding items, operating income before
depreciation and amortization fell 3.6%.
The home-shopping company has been moving to cut inventory
levels and limit extending credit to help lower bad-debt costs.
Facing a cash shortage after the financial crisis, QVC renegotiated
agreements with creditors on its $4.5 billion debt load in June. It
retired $750 million in near-term maturities, using $250 million in
cash from QVC and $500 million that it borrowed from Liberty's two
other business units.
QVC President and CEO Mike George noted the U.S. results were an
improvement over the last few quarters, when revenue had been down
between 9% and 12%.
At Starz Entertainment, earnings before depreciation and
amortization jumped 54% to $105 million as revenue grew 8% to $296
million on year-on-year subscription growth.
Fitch Ratings said in June that Liberty Media will be weaker
when it splits off Liberty Entertainment, which also owns 56% of
DirecTV, in the fourth quarter. DirecTV has said it will merge with
majority shareholder Liberty Entertainment in a move that some
analysts view as paving the way for a sale of the satellite TV
provider.
-By Nat Worden, Dow Jones Newswires; (212) 416-2472;
nat.worden@dowjones.com
(Kerry Grace Benn contributed to this story)