Englewood : Liberty Media Corporation (“Liberty”) (Nasdaq: LCAPA, LCAPB, LINTA, LINTB, LSTZA, LSTZB) has reported second quarter results for Liberty Capital group, Liberty Interactive group and Liberty Starz group. Highlights include(1):
“QVC again displayed their strength in operations and expanded its operating margin, and Starz made exciting announcements regarding their original programming,” stated Greg Maffei, Liberty President and CEO. “We significantly reduced debt at Liberty Interactive and Liberty Capital and continued to repurchase stock at Liberty Capital. We made progress on our split-off of Liberty Capital and Liberty Starz, filing our private letter ruling request with the IRS and a lawsuit seeking to clarify aspects of our indenture position.”
Liberty Interactive group’s revenue increased 6% to $2.1 billion and adjusted OIBDA increased 4% to $428 million, while operating income increased 3% to $274 million. The increase in revenue and adjusted OIBDA was primarily due to favorable results at QVC.
QVC Germany’s revenue grew 7% in local currency in the second quarter. QVC Germany’s average selling price in local currency increased 4% for the second quarter and units sold increased 2%. QVC Germany experienced a decline of 222 basis points in gross margin percentage for the quarter primarily due to an increased obsolescence provision and lower product margins in the home area due to a mix shift to consumer electronics and the accessories area.
QVC Japan’s revenue grew 10% in local currency in the second quarter. Adjusted OIBDA grew 14%, driven by a reduction in carriage commission expenses and improvements in customer service and warehouse operations. QVC Japan achieved growth of 16% in units sold for the quarter with the average selling price in local currency declining 5%. QVC Japan had sales growth in each product category partially offset by softness in the jewelry product area. QVC Japan’s gross margin percentage was flat for the second quarter.
There were no share repurchases of Liberty Interactive stock from May 3, 2010 through July 30, 2010. Liberty has approximately $740 million remaining under its Liberty Interactive stock repurchase authorization.
The businesses and assets attributed to Liberty Interactive group are engaged in, or are ownership interests in companies that are engaged in, video and on-line commerce, and currently include Liberty’s subsidiaries QVC, Provide Commerce, Backcountry.com, Bodybuilding.com, BUYSEASONS, CommerceHub, LOCKERZ and Right Start, and its interests in IAC/InterActiveCorp, HSN, Tree.com, Interval Leisure Group, and Expedia. Liberty has identified wholly-owned QVC as the principal operating segment of the Liberty Interactive group.
Liberty Starz group’s revenue increased 4% to $311 million, adjusted OIBDA decreased 1% to $103 million, and operating income increased 28% for the second quarter. The increase in revenue was primarily driven by results at Starz Entertainment. The decrease in adjusted OIBDA was primarily due to increased amortization and impairments taken on two original programs, Party Down and Gravity, which were cancelled during the quarter and an increase in corporate and other expenses.