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Liberty Media Corp. Interactive Common S Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 8, 2012 08:39PM
Liberty Media Corp. Interactive Common S (LINTA) filed Quarterly Report for the period ended 2012-03-31. Liberty M Int-a has a market cap of $10.26 billion; its shares were traded at around $18.36 with a P/E ratio of 18.6 and P/S ratio of 1.1. Liberty M Int-a had an annual average earning growth of 19.3% over the past 10 years.
Highlight of Business Operations:Revenue. Our consolidated revenue increased 7.2% or $155 million for the three months ended March 31, 2012 as compared to the corresponding prior year period. The three month increase was primarily due to increased revenue at QVC ($97 million) and the E-commerce companies ($58 million). See "Results of Operations—Businesses" below for a more complete discussion of the results of operations of certain of our subsidiaries.
QVC's consolidated net revenue increased 5.3% during the three months ended March 31, 2012 as compared to the corresponding prior quarter. The increase in net revenue of $97 million was comprised of $68 million due to a 3.2% increase in average selling price per unit ("ASP"), a $48 million increase due to a 2% increase in units sold and an increase in shipping and handling revenue of $16 million. These increases were offset by a $32 million increase in estimated product returns and unfavorable foreign currency rates in all markets except Japan of $3 million. Returns as a percent of gross product revenue increased to 19.8% from 19.5% primarily due to an increase in apparel sales as a percentage of the total mix of products sold.
QVC's operating expenses are principally comprised of commissions, order processing and customer service expenses, credit card processing fees, telecommunications expense and production costs. Operating expenses increased $4 million or 2.3% for the three months ended March 31, 2012. The increase was primarily due to a $4 million increase in commissions expense related to sales growth.
QVC's SG&A expenses include personnel, information technology, provision for doubtful accounts, credit card income and marketing and advertising expenses. Such expenses increased $16 million and as a percent of net revenue from 6.4% to 6.9% for the three months ended March 31, 2012 as a result of a variety of factors. Personnel expenses increased $15 million due to merit and benefits increases, a higher bonus accrual, as well as a charge associated with reducing the number of order entry personnel at the Chesapeake, VA, US call center due to an increase in electronic ordering from customers. Bad debt increased by $5 million compared to the prior year due to our Easy Pay installment program. These increases were primarily offset by higher credit card income of $3 million due to a higher average portfolio balance.
E-commerce businesses. Our e-commerce businesses are comprised primarily of Provide, Backcountry, Bodybuilding and Celebrate. Revenue for the e-commerce businesses is seasonal due to certain holidays, which drive a significant portion of the e-commerce businesses' revenue. The third quarter is generally lower, as compared to the other three quarters, due to fewer holidays. Revenue increased $58 million for the three months ended March 31, 2012 as compared to the corresponding prior year period. Each of our respective e-commerce businesses reported an increase in revenue, with the exception of one of our subsidiaries, for the three months ended March 31, 2012 as compared to the corresponding prior year periods. Such increases were the result of increased marketing efforts driving additional traffic, greater conversion resulting from investments in site optimization and broader inventory offerings. Adjusted OIBDA for the e-commerce businesses increased $5 million for the three months ended March 31, 2012 representing 9% of revenue in 2012, as compared to 9% in 2011. Operating income was slightly higher by $7 million as a result of the discussion above and lower stock compensation expense for the three months ended March 31, 2012 as compared to the corresponding prior year period.
Stocks Discussed: LINTA,