Diller's HSN posts $3.8 mil 1st qtr. gain
NEW YORK — Barry Diller’s HSN Inc. earned $3.8 million in the first quarter, compared with a loss of $6.9 million a year ago, in what is the latest sign of the turnaround at the Home Shopping Network, the company said Monday.
HSN said its earnings before interest, taxes, depreciation and amortization (or cash flow) jumped 76.2% to $44.4 million in the quarter, adjusted for the timing of last year’s acquisition of Savoy Pictures Entertainment Inc. and Silver King Communications.
Home Shopping Network provided all the growth, however, increasing sales in its core electronic retail business 8% to $224.8 million, although the network’s total sales were eroded slightly by a cutback at the mail order catalog business and closure of HSN’s three retail outlets.
The network’s cash flow jumped 71% to $46.1 million, which HSN said was the “highest quarterly” cash flow in its history. HSN vice chairman James Held said the performance should put to rest the skepticism about HSN’s “ability to permanently stabilize the business.”
Stock rose in early trading
The quarterly results were welcomed on Wall Street, where HSN stock rose $1.37 to $26.37 in early trading. UBS Securities analyst Ed Hatch said the cash flow was 10% higher than he expected.
“When Diller joined (in late 1995), its cash flow was $22 million. It finished 1996 with cash flow at $125 million and I am just raising my estimates. We were looking for $156 million this year and they will easily exceed that,” Hatch added.
Silver King won’t be a positive contributor to HSN for at least another year, as its programming service doesn’t begin to roll out until the first quarter of 1998. HSN said it had finalized a new $275 million credit facility to replace HSN and Silver King’s existing bank lines. Just $70 million of the credit line has been drawn down so far.