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QVC Propels Liberty in 1Q

5/10/2004 9:09 AM Eastern

Liberty Media Corp. reported better-than-expected first-quarter results, fueled by strong gains at home shopping channel QVC Inc.

QVC reported revenue of $1.3 billion in the quarter, up from $1.1 billion in the previous year, and operating cash flow rose 28% to $270 million, prompting Liberty to increase guidance for the shopping network for the full year.

Liberty said it now expects revenue and operating-cash-flow increases at QVC to be in the low- to mid-teens. Previously, the company had estimated that revenue and operating cash flow would rise in the high-single-digits.

At its premium-movie programmer, Starz Encore Group LLC, revenue rose slightly to $232 million from $229 million and operating cash flow decreased 36% to $69 million, mainly due to higher expenses related to increased programming-license fees and affiliate marketing support. But the falloff in operating cash flow was less than what some analysts predicted.

Liberty said its full-year-2004 guidance for Starz Encore of $940 million-$965 million in revenue and $185 million-$210 million in operating cash flow remains unchanged.

Discovery Communications Inc. continued to outperform -- total revenue rose 23% to $527 million and operating cash flow increased 37% to $137 million.

Liberty also raised guidance for Discovery: The cable channels are now expected to have high-teens increases in revenue, and operating cash flow should rise 30% for the full year. Liberty’s previous guidance was for high-20% increases in cash flow.

Liberty shares closed at $10.61 each Monday, down 19 cents.

September