We issued an updated research report on Liberty Interactive Corporation QVCA on Apr 13, 2015.
Liberty Interactive reported mixed fourth-quarter 2014 financial results. Net income increased 25% year over year while revenues missed the Zacks Consensus Estimate.
Liberty Interactive’s QVC division is benefiting from the surge in online sales. The major thrust is expected to come from the growing adoption of high-end smartphones in the U.S. Also, the QVC segment is the second largest e-commerce retailer in the U.S. after Amazon.com Inc. Notably, Liberty Interactive holds approximately 38% of HSN Inc. and about 22% of the equity and 57% of the total votes of all classes of TripAdvisor Inc.’s common stock.
On the flip side, the company exited the reported quarter with $8,051 million of outstanding debt compared with $5,083 million at the end of 2013. The debt-to-capitalization ratio at the end of the fourth quarter was 0.58 compared with 0.44 at the end of 2013. Meanwhile, continuous share repurchases will further dent the company’s cash position.
Increasing deployment of personal video recorders, video-on-demand technology, and IPTV network are systematically changing the distribution and viewing habits of the common people. Meanwhile, these fundamental changes are taking a toll on the home shopping networks. Moreover, the home shopping and Internet retailing market place are getting more competitive day by day.
Liberty Interactive currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in this sector include Chunghwa Telecom Co., Ltd. CHT, Level 3 Communications, Inc. LVLT and Vonage Holdings Corporation VG. Chunghwa Telecom and Vonage Holdings sport a Zacks Rank #1 (Strong Buy) whereas Level 3 Communications holds a Zacks Rank #2 (Buy).
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