John Malone’s Liberty Media Second-Quarter Financials Rise

John Malone‘s Liberty Media on Tuesday reported higher second-quarter numbers amid the inclusion of Sirius XM Radio financials and the exclusion of premium TV firm Starz, which it spun off earlier in the year.

Asked during the earnings conference call about Liberty’s interest in investing in cable operators beyond Charter Communications, president and CEO Greg Maffei said the company was “unlikely” to take stakes in other companies beyond helping Charter in potential acquisitions.

Asked if Charter needed to do deals, Maffei echoed Charter CEO Tom Rutledge‘s comments earlier in the day that the firm would be fine without any. Liberty was “excited” about Charter’s core opportunity thanks to its “very interesting” standalone business plan, Maffei said, adding that there was “optionality” around consolidation. ?So, even if there are no deals, “we are very excited about Charter’s prospects,” he concluded.

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Liberty, which this year took a controlling stake in Sirius XM, said its second-quarter earnings amounted to $937 million, compared with $96 million in the year-ago period.

Operating profit of $236 million was up from $2 million in the year-ago quarter. Adjusted operating income before depreciation and amortization, another profitability metric, rose by $354 million to $372 million. Revenue jumped by $943 million to $1.08 billion.

“Consumers love Sirius XM, and the operating performance of the business reflects that,” said Maffei.

Liberty once again said that the fair value of its ownership stakes in media and entertainment companies rose in the latest quarter — from $1.83 billion at the end of March to $5.37 billion at the end of June.

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For example, its holding in Live Nation was worth $831 million as of June 30, up from $668 million as of the end of March. Liberty also said the value of its stake in book retailer Barnes & Noble declined from $275 million to $266 million over the same period.

One big driver was the addition of a 27 percent stake in cable operator Charter Communications to Liberty’s holdings in the latest quarter; it was worth $3.3 billion at the end of June.

Said Maffei, “Charter Communications has proved an attractive investment, generating a greater than 35 percent return since we completed the investment.”

Also on Tuesday, Malone’s Liberty Interactive Group, which is built around home-shopping network QVC, posted second-quarter earnings of $120 million, down from $234 million in the year-ago period.

Revenue increased 1 percent to $2.4 billion, adjusted OIBDA was “relatively flat” at $455 million, and operating profit dropped 8 percent to $268 million, the firm said.

Exchange rate fluctuations — primarily the strengthening of the dollar against the Japanese yen — and higher amortization and depreciation and stock compensation expense hurt the bottom line.

“QVC posted solid results in the U.S. while the international markets proved more challenging and were negatively impacted by the currency fluctuations in Japan and the U.K.,” said Maffei.

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai