Back to top

Analyst Blog

Liberty Interactive Inc. (LINTA - Analyst Report) reported solid financial results for the third quarter of 2012, outpacing the Zacks Consensus Estimates. Quarterly net income was $49 million or 20 cents per share compared with $25 million or 10 cents per share in the year-ago quarter. Third-quarter 2012 earnings per share of 20 cents surpassed the Zacks Consensus Estimate of 18 cents. Quarterly total revenue of $2,196 million reflected a yearly improvement of 3%, surpassing the Zacks Consensus Estimate of $2,175 million.

Third-quarter 2012 gross margin was 35.9% compared with 36.1% in the prior-year quarter. Quarterly total operating income came in at $193 million as opposed to $225 million in the year-ago quarter. In the reported quarter, consolidated adjusted OIBDA came in at $397 million compared with $378 million in the year-ago quarter. In the previous quarter, Liberty Interactive repurchased approximately 3 million Class A shares for a total consideration of $55.9 million.  

In the first nine months of 2012, Liberty Interactive generated $944 million of cash compared with $516 million in the year-ago period. Free cash flow in the first nine months of 2012 was $707 million compared with $324 million in the prior-year period.

At the end of the third quarter of 2012, Liberty Interactive had total consolidated cash and marketable securities of $3,435 million compared with $2,015 million at the end of 2011. Liberty Interactive exited the third quarter of 2012 with $7,357 million of outstanding debt compared with $6,039 million at the end of 2011. Debt-to-capitalization ratio was 0.49 at the reported quarter end compared with 0.42 at the end of 2011.

QVC Segment

Quarterly total revenue of QVC segment was $1,918 million, up 1.7% year over year. Consolidated adjusted OIBDA was $397 million, up 7% year over year. Consolidated operating income was $260 million, up 11.1% year over year. QVC U.S. quarterly revenue inched up 3.4% year over year to $1,237 million. Gross margin was 36.1% compared with 35.7% in the year-ago quarter. Adjusted OIBDA was $278 million, up 7.3% year over year. Operating income was $173 million, up 8.8% year over year. QVC International quarterly revenue dropped 1.3% year over year to $681 million. Gross margin was 37.4% compared with 36.7% in the year-ago quarter. Adjusted OIBDA was $119 million, up 4.4% year over year. Operating income was $87 million, up 16% year over year.

eCommerce Segment

Quarterly revenue of eCommerce Business segment was $278 million, up 13% year over year. Quarterly adjusted OIBDA was $4 million, down 56% year over year. Operating loss was $56 million, in the quarter, much wider than an operating loss of $2 million in the prior-year quarter.

Recommendation

Liberty Interactive’s QVC division has become the undisputed market leader in the $8 billion TV home-shopping business. Currently, QVC commands an estimated 69% market share, far ahead of its nearest rivals, HSN Inc. (HSNI - Snapshot Report) and ValueVision Media Inc. (VVTV - Snapshot Report). We maintain our long-term Neutral recommendation on Liberty Interactive. Currently, the stock holds a short-term Zacks #3 Rank (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%