Liberty Interactive Corp. (LINTA) reported disappointing financial results for the second quarter of 2014. Quarterly net income was $105 million or 21 cents per share compared with $109 million or 21 cents per share in the year-ago quarter. However, second-quarter earnings per share of 21 cents lagged the Zacks Consensus Estimate of 27 cents.
Quarterly total revenue of $2,495 million reflected a year-over-year improvement of 4% but fell below the Zacks Consensus Estimate of $2,512 million.
Quarterly total operating income came in at $255 million compared with $268 million in the year-ago quarter. In the reported quarter, consolidated adjusted operating income before depreciation and amortization stood at $452 million against $455 million in the year-ago quarter.
From May 1, 2014 through Jul 31, 2014, Liberty Interactive repurchased approximately 9.5 million Series A shares for a total consideration of $274 million. During the first half of 2014, Liberty Interactive generated $570 million of cash from operations compared with $382 million in the year-ago period. Free cash flow in the reported quarter was $483 million against $271 million in the prior-year period.
At the end of the second quarter of 2014, Liberty Interactive had total cash and marketable securities of $707 million compared with $602 million at the end of 2013. Liberty Interactive exited the reported quarter with $5,234 million of outstanding debt compared with $5,083 million at the end of 2013. The debt-to-capitalization ratio at second-quarter end was 0.46 compared with 0.44 at the end of 2013.
QVC, a segment of Liberty Interactive, is the second largest e-commerce retailer in the U.S. after Amazon.com Inc. (AMZN). Liberty Interactive also holds approximately 38% of HSN Inc. (HSNI) and about 22% of the equity and 57% of the total votes of all classes of TripAdvisor Inc. (TRIP) common stock. Liberty Interactive currently has a Zacks Rank #3 (Hold).
QVC Segment
Quarterly total revenue at the QVC segment was $2,014 million, up 3% year over year. Adjusted OIBDA was $439 million, up 1% year over year. Operating income stood at $284 million, remaining flat year over year.
Quarterly revenues of QVC U.S. inched up 3% year over year to $1,352 million. Gross margin was 37.7% against 37.3% in the prior-year quarter. Adjusted OIBDA stood at $325 million, up 1.6% year over year. Operating income was $203 million, down 1.9% year over year.
Quarterly revenues of QVC International rose 2% year over year to $682 million. Gross margin was 38.3% compared with 37.8% in the prior-year quarter. Adjusted OIBDA was $114 million, remaining flat year over year. Operating income was $81 million, up 3.9% from the year-ago quarter.
eCommerce Segment
Quarterly revenues at the eCommerce segment totaled $481 million, up 10% year over year. Quarterly adjusted OIBDA was $19 million, down 26.9% year over year. Operating loss was $16 million as against an operating loss of $2 million in the year-ago quarter.
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