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Liberty Media posts wider loss

Thu, 03/09/2006 - 5:49am

Copyright 2006 MarketWatch.com Inc.
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MarketWatch
March 8, 2006 Wednesday 4:52 PM EST

NEW YORK (MarketWatch) -- Liberty Media Corp. on Wednesday posted a wider fourth-quarter loss, even as revenue jumped at its QVC business.

The Englewood, Co.-based media conglomerate posted a loss of $86 million, or 3 cents a share, compared with a loss of $2 million, or nil a share, in the year-ago period.

Liberty's (L) revenue in the quarter rose to $2.45 billion, from $2.17 billion a year earlier. Analysts polled by Thomson First Call were expecting revenue of $2.32 billion.

Earlier this month, Greg Maffei, former chief financial officer at Oracle Corp., assumed the chief executive role at Liberty.

The company, which is controlled by media mogul John Malone, said home shopping channel QVC's revenue grew 14% for both the fourth quarter and full year. Operating cash flow for the unit also grew 14%.

In the U.S., QVC's fourth-quarter revenue growth was driven by increased sales of home-related items.

Starz Entertainment Group, the parent of the various Starz and Encore premium movie networks, saw revenue slip to $248 million from $254 million.

Liberty noted that fourth-quarter average subscriptions were up 7% and 8% at Starz and Encore, respectively.

For most of the full year 2005, Starz and Encore subscriptions "remained relatively flat," Liberty said, due to a variety of factors, including a drop-off in digital cable subscriber growth rates; a move by some cable operators to promote other services at the expense of premium services like Starz and Encore; and hurricane damage in the Gulf Coast region during the third quarter.

During a conference call with analysts, Maffei commented on the company's stake in Time Warner Inc.

Liberty made a request last month to convert its nonvoting shares of Time Warner (TWX) to voting shares ahead of the schedule imposed by the Federal Trade Commission several years ago.

When Liberty was a subsidiary of the old cable giant TCI, in 1997, the FTC had prohibited Liberty from converting its stake, about 4% of Time Warner, into voting stock until February 2007.

Maffei said Liberty is "in continued dialogue" with Time Warner about ways it might swap its stake for assets, especially if it can do so in a tax-efficient manner.

He also discussed whether Liberty would be interested in trading its nearly 19% stake in News Corp. (NWS) for certain properties. News Corp. Chairman Rupert Murdoch has expressed concern about Liberty's accumulation of more stock, even calling for the implementation of a "poison pill" shareholder rights plan.

For now, though, said Maffei: "We are very impressed with the things that News has done, repositioning itself in the Internet space, driving and doing well with its businesses, and ... we think it is undervalued and therefore an asset that we feel very comfortable holding."

During the quarter, Liberty announced the creation of two tracking stocks. Liberty Interactive will follow the performance of the company's interactive assets, including stakes in Barry Diller's InterActive Corp. (IACI) and the Expedia (EXPE) online travel service, while Liberty Capital will track all assets and businesses not related to Liberty Interactive.

The tracking stocks are slated to debut in May.

In January, Liberty unveiled Vongo, a subscription Internet downloading service that gives users access to movies, music concerts and other content for $9.99 a month.

Liberty shares rose 1 cent to close at $8.

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