John Malone's Liberty Media Buys More Charter Shares, Posts Mixed Financials

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John Malone

UPDATED: The company's stake in Charter now amounts to 26.4 percent as it plans to go ahead with the spin-off of Liberty Broadband, and CEO Greg Maffei discusses the firm's interest in Vevo.

John Malone's Liberty Media on Thursday reported mixed first-quarter financials as revenue rose, operating profit climbed slightly and net profit declined after a big one-time gain in the year-ago period.

Liberty recorded a quarterly revenue increase of $222 million to $1.01 billion. Operating earnings increased $4 million to $155 million. Both figures benefited from the inclusion of satellite-TV giant Sirius XM's results starting last year.

A $7.48 billion year-ago gain from a transaction and other factors led to lower net earnings though. Liberty posted earnings of $22 million, down from $8.06 billion.

Liberty on Thursday also said it acquired more shares of cable operator Charter Communications, worth $124.5 million, to bring its stake to 26.4 percent. And it confirmed it would go ahead with a plan to spin off some of its business into a separately traded company called Liberty Broadband Group, including Charter, TruePosition, a minority stake in Time Warner Cable and financial instruments.

"We believe a separate Liberty Broadband will offer investors greater choice and transparency, and is well-timed with Charter's agreements with Comcast, which will result in Charter owning or serving over 8 million video customers," said Liberty CEO Greg Maffei. "We anticipate completing the distribution of ... shares in the third quarter and the spin-off by the end of the year."

Liberty on Thursday also disclosed the latest fair values of its holdings in publicly traded companies, which together declined in value from $6 billion as of the end of 2013 to $5.71 billion at the end of March. Its Charter stake as of the end of March was worth $3.31 billion, down from $3.67 billion, while the value of its Live Nation stake was up.

During an earnings conference call, Maffei was asked if Liberty could make future cable acquisitions without Charter, responding that this was "unlikely," as Liberty likes the Charter management team and sees the benefits of scale. "They seem to be the best game in town," he said about Charter.

Asked about Liberty's interest in online music service Vevo, he said his team was watching the sector, as it was "an interesting space." He declined to comment on recent chatter that the company has made an offer for Vevo. 

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