Liberty at a loss

One-time charge hurts cabler in 1st quarter

Despite a big one-time gain for accounting rule changes, John Malone’s Liberty Media Group on Wednesday posted a first-quarter loss of $152 million.

That compared with a profit of $942 million in the same period last year. The red ink in the latest quarter would have totaled $697 million if not partially offset by a $545 million gain from accounting changes.

Liberty’s revenue more than doubled in the latest quarter to $504 million from a year-earlier $235 million.

The Denver-based company is a unit of telecom giant AT&T operated autonomously by Liberty chairman Malone. But Liberty chief Robert Bennett told press and analysts Wednesday he expects the telecom giant will complete a long-anticipated spinoff of Liberty by mid-July.

Major minority stakes

Liberty has few actual operations of its own but holds big, minority stakes in several cable programmers. Among those are a 42% stake in home-shopping channel QVC and a 49% stake in Discovery Communications, which operates science and nature networks.

Some of Liberty’s investments in the past year have tanked, including a stake in ICG Communications, which went bankrupt and Priceline.com, whose stock has declined more than 80%. As a result, some $304 million of Liberty’s losses in the latest quarter came in the form of a write-off of various investments.

Also Wednesday, Liberty Media’s Liberty Livewire post-production unit reported a greatly broadened first-quarter loss even as revenue grew fivefold from acquisitions.

Operated as Todd-AO before a name change, L.A.-based Liberty Livewire was taken over by Liberty Media last June in a transaction featuring a combination with Burbank post group Four Media.

As a result, the latest quarter saw acquisition-fueled interest expenses balloon to $13.6 million in the latest quarter from $1 million in the fiscal first quarter of the previous fiscal year through Feb. 29. Since the year-earlier period, Liberty Livewire has switched its reporting periods to conform with the calendar year.

Red ink totaled $13.5 million in the latest quarter, compared with a loss of $715,000 in the previous fiscal first quarter.

Revenue was $154.3 million vs. $31.1 million.