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Liberty Media Outperforms

by Zacks Equity Research

February 29, 2012 | Comments : 0 Recommended this article: (0)

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Liberty Media Corp. ( LMCA - Analyst Report ) reported strong financial results for the fourth quarter of 2011, driven by solid performance of its Starz premium cable TV business. Quarterly total revenue increased an enormous 96% to $973 million, surpassing the Zacks Consensus Estimate of $304 million. Quarterly GAAP net income was $434 million or $4.87 per share compared with a net income of $889 million or $10.53 per share. Quarterly EPS of $4.87 was significantly higher than the Zacks Consensus Estimate of 32 cents.

In the fourth quarter of 2011, Liberty Media’s adjusted OIBDA (operating income before depreciation and amortization) came in at $323 million, up 205% year over year. Quarterly operating income was $293 million, up 241% year over year. The primary reason for this significant rise in OIBDA and operating income is the recognition of previously deferred revenue and costs at TruePosition. Since the reclassification of the original Liberty Capital tracking stock on March 4th, 2008 through January 31st, 2012, Liberty Media has repurchased 55 million shares for a total cash consideration of $1.6 billion.

During 2011, Liberty Media generated $276 million of cash from operations compared with $121 million in 2010. Free cash flow in 2011 was $262 million compared with $105 million in 2010. At the end of 2011, Liberty Media had $2,070 million of cash and cash equivalents compared with $2,090 million at the end of 2010. Total debt, at the end of 2011, was $1,295 million compared with $2,138 million at the end of 2010.

Starz LLC Segment

Revenue in the fourth quarter of 2011 was $432 million, up 8% year over year. However, adjusted OIBDA decreased 15% year over year to $93 million. Operating income was $87 million, up 24% year over year. Quarterly net income was $49 million compared with $40 million in the year-ago quarter. During 2011, Starz added a net 1.4 million cable TV subscribers with subscriber base of 19.6 million at the end of 2011. Liberty Media has extended its affiliation agreement with AT&T Inc’s ( T - Analyst Report ) U-verse network.

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