Update Liberty Media scraps ‘Interactive’s’ guidance -
Liberty Media scraps ‘Interactive’s’ guidance
John Malone's various Denver-based ‘Liberty' operations unveiled their Q3 results. Numbers covered Liberty Media, Liberty Capital, Liberty Interactive and Liberty Entertainment. CEO Greg Maffei admitted that that Liberty has not been immune from the current downturn. Maffei told analysts that it was withdrawing its previous financial guidance as far as its Interactive business was concerned.
"Although several of our businesses, including Starz and our e-commerce companies, produced solid results, Liberty has not been immune to the volatile economic climate," stated Greg Maffei, Liberty President/CEO. "In light of the financial market turmoil, we continued our focus on balance sheet management. We successfully drew down our QVC bank facilities and retired 87% of our senior notes that mature in mid-2009."
Liberty said its Liberty Interactive Group/QVC posted third quarter revenue of $1.64 billion, down 2% from $1.68 billion in the previous year period. Maffei continued, "Our Board of Directors has authorized a change in the attribution of $551 million of our Viacom exchangeable senior debentures from Liberty Entertainment to Liberty Interactive along with $380 million in cash, which bolsters Liberty Interactive's liquidity.
"Liberty Interactive will use $300 million of this cash to fund a tender offer for two series of our senior debentures. A successful tender will reduce Liberty Interactive's interest expense. This change in the attribution of the exchangeable senior debt is a necessary step in a potential split-off of Liberty Entertainment. That being said, we continue to evaluate the split-off of Liberty Entertainment and its timing, given market conditions."
In light of financial conditions, Liberty is withdrawing Liberty Interactive's guidance provided in 2006 and will not be providing new guidance for the foreseeable future. Since DIRECTV will not release earnings until November 6th, Liberty will not be making any comments on their results in this release."
Liberty Entertainment group's revenue grew 21%, but adjusted operating income declined 15% in Q3, due to affiliate agreements at Starz Entertainment. The increase in revenue was primarily due to the addition of the Liberty Sports Group, which was acquired in February 2008. Starz Entertainment's Q3 revenue slipped 1% to $278m, as operating income decreased 11% to $78m.