Look out, Amazon, Yahoo! and eBay — Barry Diller’s got your number.
With another stellar quarter at booming New York-based e-commerce kingdom Interactive Corp., former media mogul Diller’s e-tailer is fast establishing itself as the cash-flow king of the dot-com world. And even though he’s not an entertainment wheeler-dealer — at least not for now — Diller’s team has no shortage of resources to do even more deals.
Hefty gains from a booming and seemingly recession-defiant travel sector and electronic retailing drove revenues to $1.5 billion, a healthy 38% gain for the quarter. Net income dropped to $92.9 million, down from the $2.2 billion a year ago that included the $2.4 billion one-time gain from the sale of its USA entertainment assets to Vivendi Universal.
“The trinity of (dot-com successes) Amazon, eBay and Yahoo! has been expanded by one to include us,” Diller told analysts during Tuesday’s conference call. “It is kind of remarkable that our cash flow today is greater than (those three) combined,” he added, noting that Interactive (formally known as USA Interactive) has become the most profitable e-commerce company with a strategy of using multiple brands.
Specifically, company recorded hefty free cash flow of $823 million for the first six months of the year, compared to $306 million in the prior-year period.
Diller said there was no shortage of places to park those hefty cash reserves, as the company was currently reviewing 10 acquisitions. Company indicated at least one $1 billion or so deal would likely close in the next several months. Diller did not elaborate on any plans to pursue VUE, seeming content to trumpet the success of his new electronic portfolio.
Interactive’s assemblage of brands includes travel services groups Expedia and Hotels.com, dating service Match.com, Ticketmaster, HSN and, as of next quarter, the online financial services group LendingTree.
And for the second quarter in a row, HSN’s domestic subscribers increased at a faster pace than rival QVC’s. Company said this is evidence that HSN is finally taking market share from its larger and more profitable rival, which is now wholly owned by John Malone’s Liberty Media, a 19% shareholder in Interactive.
But IAC stock was nevertheless off by 7% to $36.50, as the company said it would prefer acquisitions to share buy-backs and warned that full-year earnings may be lower than previously forecast, partly due to expenses associated with acquisitions. Operating income for the quarter rose to $111.8 million compared to $25.4 million a year ago, thanks to Diller’s recent acquisitions binge and healthy growth from electronic retailing and travel services.
Electronic retailing revenue was up 18% to $527.1 million, thanks to the strong showing from HSN, whose international channels reported a 73% leap in sales.