Shares in QVC Inc. showed every intention of extending their losing streak to five consecutive days before staging a late afternoon recovery Thursday on favorable technical factors.
After hitting a new 52-week low of $ 36.75 early in the session, QVC shares rebounded to close up $ 1.63 at $ 40.13. Traders said the stock likely popped up as investors hunted for bargains in the oversold issue. They also cited an overall rebound among growth stocks as the Nasdaq composite index rose 4.86 points to a new record close of 803.68.
Widespread speculation that chairman Barry Diller is plotting another acquisition campaign for a wide range of targets — including a media giant and a network — has triggered some concern about his willingness to leverage the shopping channel.
“We are looking at a transition here in 1994 because of the cost of overseas joint ventures and the launch of Q2, so estimates started going down a month ago ,” said Craig Bibb, analyst at PaineWebber. “That is taking the stock down and people are worried about the next thing Diller might buy.”
A QVC spokesman said the company does not comment on market speculation about major corporate moves.
Last week, QVC said earnings for the fourth quarter fell 85% to $ 2.8 million or 6 cents per share, largely due to an after-tax charge of almost $ 19 million related to Diller’s failed bid for Paramount Communications. For the year ended Jan. 31, QVC earned $ 59.3 million or $ 1.18 per share.
Other charges included an annual $ 11.4 million pre-tax loss for the home shopper’s new Mexican and British joint ventures, although some analysts consider those hits relatively modest considering the international market’s long-term potential.
Still, Wall Street is slowly trimming its estimates for QVC’s 1995 full year earnings per share. A survey of 13 analysts puts the mean forecast at $ 1.83 per share, down from $ 1.87 a week ago and $ 1.88 about 13 weeks ago. The highest forecast is $ 2 per share and the lowest $ 1.50 per share.
Despite the rumors about Diller’s more ambitious acquisition plans, industry observers believe QVC might try to woo back Home Shopping Network after dumping it last year to pursue the more glamorous Par.
But they note that QVC is likely to wait in any case until June, when a decision is expected in the U.S. Supreme Court’s review of cable regulation.
The FCC’s “must carry” rule requires a cable system to carry the signal of any broadcast station that requests carriage even if that means bumping a cable network.
But some cable programmers are protected in their contracts against preemption by a weaker broadcast signal. Industry watchers believe HSN is at greater risk than QVC if the Supreme Court favors must carry.