Liberty Interactive Inc.
) reported solid financial results for the second quarter of 2012,
outpacing the Zacks Consensus Estimates. Quarterly net income was
$234 million or 42 cents per share compared with $257 million or 30
cents per share in the year-ago quarter.
Second-quarter 2012 earnings per share of 42 cents were
significantly higher than the Zacks Consensus Estimate of 23 cents.
Quarterly total revenue of $2,365 million was an improvement of
5.3% year over year, surpassing the Zacks Consensus Estimate of
Second-quarter 2012 gross margin was 37.1% compared with 37.7%
in the prior-year quarter. Quarterly total operating income came in
at $290 million as opposed to $288 million in the year-ago
In the reported quarter, consolidated adjusted OIBDA came in at
$455 million compared with $450 million in the year-ago quarter. In
the previous quarter, Liberty Interactive repurchased approximately
14.7 million Class A shares for a total consideration of $257.4
In the first half of 2012, Liberty Interactive generated $730
million of cash compared with $332 million in the year-ago period.
Free cash flow in the first half of 2012 was $579 million compared
with $229 million in the prior-year period.
At the end of the second quarter of 2012, Liberty Interactive
had total consolidated cash and marketable securities of $2,174
million compared with $2,015 million at the end of 2011. Liberty
Interactive exited the second quarter of 2012 with $6,049 million
of outstanding debt compared with $6,039 million at the end of
2011. Debt-to-capitalization ratio was 0.42 at the reported quarter
end compared with 0.42 at the end of 2011.
Quarterly total revenue of
was $1,974 million, up 4% year over year. Consolidated adjusted
OIBDA was $438 million, up 5% year over year. Consolidated
operating income was $301 million, up 7% year over year.
quarterly revenue inched up 4% year over year to $1,280 million.
Gross margin was 37.2% compared with 37.5% in the year-ago
Adjusted OIBDA was $315 million, up 3% year over year. Operating
income was $214 million, up 5% year over year.
quarterly revenue grew 4% year over year to $694 million. Gross
margin was 38.1% compared with 38% in the year-ago quarter.
Adjusted OIBDA was $123 million, up 9% year over year. Operating
income was $87 million, up 13% year over year.
Quarterly revenue of eCommerce Business segment was $391
million, up 13% year over year. Quarterly adjusted OIBDA was $23
million, down 36% year over year. Operating loss was $1 million
compared with an operating income of $19 million in the prior-year
Formation of Tracking Stocks
Yesterday, the Board of Directors of Liberty Interactive has
received its shareholders' approval to split the company's shares
into two tracking stock, viz., Liberty Interactive and Liberty
Ventures. The Liberty Interactive tracking stocks will follow QVC,
the eCommerce companies, a 34% stake in
), approximately $500 million of cash and $5 billion of debt and
Liberty Venture will look after minority interests of
Time Warner Inc.
Time Warner Cable Inc.
), AOL, Interval Leisure Group, Tree.com and Liberty's green-energy
investments. Liberty Venture will be assigned around $1.25 billion
of cash and $3 billion principal amount of Liberty Interactive's
publicly traded exchangeable debentures.
We maintain our long-term Neutral recommendation on Liberty
Interactive. Currently, the stock holds a short-term Zacks #3 Rank
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