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A Mixed Bag for Liberty Media

by Zacks Equity Research

May 09, 2012 | Comments : 0 Recommended this article: (0)

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Liberty Media Corp. (LMCA - Analyst Report) reported mixed financial results for the first quarter of 2012. Quarterly total revenue dropped substantially 55% to $440 million, way behind the Zacks Consensus Estimate of $473 million. Quarterly GAAP net income was $137 million or $1.10 per share compared with a net income of $331 million or $4.30 per share. However, quarterly earnings per share of $1.10 were significantly higher than the Zacks Consensus Estimate of 67 cents.

In the first quarter of 2012, Liberty Media’s adjusted OIBDA (operating income before depreciation and amortization) came in at $110 million, down 77.3% year over year. Quarterly operating income was $89 million, down 80.6% year over year. In the previous quarter, Liberty Media has repurchased 1.4 million shares for a total cash consideration of $120.1 million.

During the first quarter of 2012, Liberty Media generated $94 million of cash from operations compared with $265 million in the prior-year quarter. Free cash flow in the reported quarter was $92 million compared with $262 million in the year-ago quarter. At the end of the first quarter of 2012, Liberty Media had $3,746 million of cash and cash equivalents compared with $3,929 million at the end of 2011. Total debt, at the end of the first quarter of 2012, was $544 million compared with $1,295 million at the end of 2011. At the end of the previous quarter, debt-to-capitalization ratio was 0.09 compared with flat at the end of 2011.

Starz LLC Segment

Revenue in the first quarter of 2012 was $405 million, up 3.6% year over year. However, adjusted OIBDA decreased 3.2% year over year to $127 million. Operating income was $120 million, down 3.2% year over year. At the end of the reported quarter, total subscribers base of Starz increased 7% to 20.1 million.

Major Announcement

Liberty Media declared that it has entered into a forward purchase contract for 302 million shares of SIRIUS XM Radio Inc. (SIRI - Analyst Report). The forward price is set at $2.15 per share or a total of $650 million. Settlement of this forward contract will raise Liberty Media’s stake in SIRIUS XM Radio to 45.2% from the existing 40%.

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