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Liberty Media (LMCA) Downgraded to Hold after Q3 Results

On Nov 10, 2015, Zacks Investment Research downgraded Liberty Media Corp.LMCA - a leading media conglomerate in the U.S - by a notch to a Zacks Rank #3 (Hold).

Liberty Media recently reported mixed financial results in the third quarter of 2015. While loss incurred compared unfavorably to the Zacks Consensus Estimate of earnings, the top line was just on par with the benchmark. The company is steadily restructuring its business with an aim to control several subscription-based businesses.

Currently, Liberty Media controls around 53% stake in SIRIUS XM Holdings SIRI . In the third quarter of 2015, SIRIUS XM added 525,000 subscribers taking Liberty Media's total subscriber tally to 28,960,000 as of Sep 30, 2015, up 8.3% year over year. SIRIUS XM, the largest satellite radio service provider, is expected to generate significant financial synergies for Liberty Media over the long haul.

Liberty Media is also investing in Charter Communications in order to support the latter to complete the purchase of Time Warner Cable Inc. TWC and Bright House Networks. Liberty Media presently holds 27.3% stake in Charter Communications. The mergers are subject to regulatory approval. The deals, if successful, are likely to benefit Charter in terms of geographic expansion and operating cost synergies, which in turn, will boost its bottom line and free cash flow.

However, Liberty Media is highly dependent on subscription-based services of SIRIUS XM, Live Nation Entertainment and Charter Communications Inc. CHTR . These subscription-based services, in turn, are vulnerable to economic downturns. Therefore, persisting macroeconomic fluctuations in the U.S might significantly jeopardize Liberty Media's future financial results.

Moreover, Liberty Media's businesses are susceptible to rapid technological changes. Large cable TV operators are increasingly deploying digital TV networks, which are gaining significant market traction. This may adversely impact the channel positioning of Liberty Media's networks. Increasing deployment of personal video recorders, video-on-demand technology and IPTV network are systematically changing the distribution and viewing habits of the common people.

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SIRIUS XM HLDGS (SIRI): Free Stock Analysis Report

CHARTER COMM-A (CHTR): Free Stock Analysis Report

TIME WARNER CAB (TWC): Free Stock Analysis Report

LIBERTY MEDIA-A (LMCA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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