Liberty Media Corp.
) reported mixed financial results for the third quarter of 2012.
Quarterly GAAP net income was $1,007 million or $8.46 per share
compared with a net loss of $42 million or a loss of $1.15 per
share. However, quarterly adjusted earnings per share of 34 cents
were significantly lower than the Zacks Consensus Estimate of 84
cents. On the revenue front, it rose 2.8% year over year to $555
million and was also well above the Zacks Consensus Estimate of
In the third quarter of 2012, Liberty Media's adjusted OIBDA
(operating income before depreciation and amortization) came in
at $137 million, up 6.2% year over year. Quarterly operating
income was $111 million, remaining same year over year. In the
previous quarter, Liberty Media repurchased 0.2 million shares
for a total cash consideration of $22.3 million.
During the first nine months of 2012, Liberty Media generated
$228 million of cash from operations compared with $316 million
in the prior-year period. Free cash flow in the first nine months
of 2012 was $216 million compared with $307 million in the
At the end of the third quarter of 2012, Liberty Media had
$2,943 million of cash and cash equivalents compared with $3,929
million at the end of 2011. Total debt, at the end of the
reported quarter, was $541 million compared with $1,295 million
at the end of 2011. At the end of the previous quarter,
debt-to-capitalization ratio was 0.08 compared with 0.09 at the
end of 2011.
Starz LLC Segment
Revenue in the third quarter of 2012 was $400 million,
remaining same year over year. Adjusted OIBDA was $108 million,
remaining same year over year. Operating income was $99 million,
showing a yearly decline of 2%. At the end of the reported
quarter, total subscribers base of Starz notched up 9% to 20.8
million while its sister TV channel Encore had 34.3 million
subscribers, up 5% year over year.
Liberty Media has decided to spin-off its Starz entertainment
segment as a separate entity by the end of 2012. According to
management, the spin-off of Starz will unlock the latter's value
by optimizing its capital structure thereby enabling Starz to
find several alternative ways and partnerships for both content
creation and distribution.
The spin-off is envisioned to provide a cash dividend of $1.8
billion to Liberty Media. We believe the spin-off of Starz will
help Liberty Media to increase its stake in
Barnes & Noble Inc.
Live Nation Entertainment Inc.
), together with
SIRIUS XM Radio Inc.
We maintain our long-term Neutral recommendation on Liberty
Media. Currently, it holds a short-term Zacks #3 Rank (Hold) on
BARNES & NOBLE (BKS): Free Stock Analysis
LIBERTY MDA-LC (LMCA): Free Stock Analysis
LIVE NATION ENT (LYV): Free Stock Analysis
SIRIUS XM RADIO (SIRI): Free Stock Analysis
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