QVC, Discovery Fuel Liberty5/09/2005 9:24 AM Eastern
Liberty Media Corp. swung to a first-quarter profit, fueled by strong growth in its QVC Inc. and Discovery Communications Inc. units.
According to a 10-Q quarterly report filed Monday with the Securities and Exchange Commission, Liberty reported net income of $254 million (9 cents per share), compared with a $10 million loss in the same period last year. Revenue was up 14% to $2 billion in the quarter.
Fueling that growth was strong performance from QVC, which reported a 14% rise in revenue to $1.5 billion and a 19.6% increase in operating cash flow to $323 million.
Revenue at DCI rose 14% to $601 million in the period and operating cash flow rose 8% to $148 million.
Liberty -- which announced plans to spin off its 50% interest in DCI, along with its 100% interest in Ascent Media Group, into a separate publicly traded unit called Discovery Holding Co. earlier this year -- said in the filing that the deal could be closed in the second quarter.
Starz Entertainment Group LLC reported a 9.5% increase in revenue, primarily due to subscriber gains, but operating cash flow dipped 30.4% to $48 million in the quarter from $69 million.
In the SEC document, Liberty said the reasons for the Starz decline were an increase in Thematic Multiplex subscribers (which pay a lower rate) and increasing programming costs.
Thematic Multiplex subscribers rose to 131.5 million in the first quarter, compared with 130.5 million in the fourth quarter. Subscribers for its Starz, Encore and Movieplex services remained flat.
Programming costs rose 29.9% in the quarter to $165 million from $127 million in the same period last year. Starz said it expected full-year programming costs to increase $115 million-$135 million.