Liberty Media: A Better Quarter For Some Pieces Than Others

Liberty Media this morning reported results for all three (soon to be four) of the sprawling empire’s public entities, resulting in distinctly conflicting reactions from the Street. Controlled by investor John Malone, Liberty consists of three tracking stocks: Liberty Interactive (LINTA), Liberty Entertainment (LMDIA) and Liberty Capital (LCAPA). Liberty Entertainment is in the process of converting to an operating company and merging with DirecTV (DTV); the transaction will create a fourth company called Liberty Starz (LSTZA), which will mostly consist of the Starz cable television network.

Here’s a look at how each of the Liberty pieces did in the quarter:

• Liberty Interactive: The company posted revenue for the quarter of $1.8 billion, up 2% year over year, but a bit below the Street consensus at $1.83 billion. Interactive is dominated by QVC, the cable and web based shopping channel. QVC posted Q3 revenue of $1.7 billion, up 2% year over year. Bank of America/Merrill Lynch analyst Jessica Reif Cohen wrote in a research note that results at QVC were in line at the revenue line, but better-than-expected in terms of EBITDA, due to “a healthy recovery in margins.” But she notes that the stock is down today “due to investors’ expectation of even faster U.S. growth.” I’d also note that revenue at the unit’s e-commerce businesses were down 4% year over year adjusted for acquisitions, a decline the company blamed on the economic downturn.


• Liberty Entertainment: Entertainment increased revenue 2% year over year, with Starz Entertainment posting an 8% revenue increase and a 19% rise in operating income before depreciation and amortization.


• Liberty Capital posted a 22% drop in revenue in the quarter, while adjusted OIBDA was up modestly. The company noted that its Overture Films unit had two disappointing releases with Pandorum and Capitalism: A Love Story. But it noted that it has been doing better lately, with strong box office for Law Abiding Citizen and Men Who Stare At Goats.

The company also said it has decided not to proceed with reverse stock splits for the Liberty Capital and Liberty Interactive shares; it also announced plans to buy back $500 million of Liberty Starz shares upon the completion of the spit-off of Liberty Entertainment.

In today’s trading:

• LINTA is down 69 cents, or 5.7%, to $11.44.


• LMDIA is up 8 cents, or 0.2%, to $33.20.


• LCAPA is up $1.46, or 6.5%, to $24.11.


• LSTAV (the when-issued version of Liberty Starz) is up $2.07, or 4.4%, to $48.92.