Liberty Media Upped to Outperform - Analyst Blog
September 16 2013 - 2:00PM
Zacks
We upgraded our recommendation on
Liberty Media Corp. (LMCA) to Outperform based on
strong financial results for the second quarter of 2013. Although
total revenue was mostly in line with the Zacks Consensus Estimate,
earnings per share significantly outpaced the same. Liberty Media
currently has a Zacks Rank #1 (Strong Buy).
Why the
Upgrade?
Liberty Media is steadily
restructuring its business model in its aim to control several
subscription-based companies. Strong performance in the said
quarter was primarily driven by the contribution from the company’s
newly acquired controlling stake of SIRIUS XM Radio
Inc. (SIRI). Management is pursuing a systematic share
buyback program to enhance shareholders’ wealth. Moreover, the
spin-off of the Starz segment as a separate entity helped Liberty
Media to improve its financial position.
Recently, Liberty Media entered
into the cable TV market after acquiring 27.3% stake of
Charter Communications Inc. (CHTR), the fourth
largest pay-TV operator in the U.S. Liberty Media is striving to
enable Charter Communications’ acquisition of a major cable TV
operator in the U.S. Earlier this year, Charter Communications
declared its plans to acquire Cablevision Systems
Corp.’s (CVC) western U.S. cable systems, Optimum West,
for around $1.6 billion in cash.
On Jun 25, 2012, the U.S. District
Court in Manhattan awarded nearly $1 billion to Liberty Media as it
found the French entertainment firm, Vivendi, guilty of not
disclosing its true financial position to Liberty Media in 2001 in
an equity swap deal. In 2001, Vivendi bought USA Network for over
$10.3 billion.
As part of the deal, Vivendi gave
Liberty Media 32 million treasury shares and an additional 5.2
million shares for its holding in a European cable joint venture
with Vivendi. Vivendi later appealed against the ruling. However,
in Jan 2013, the District Court in Manhattan once again gave the
order in favor of Liberty Media and rejected Vivendi’s
petition.
CHARTER COMM-A (CHTR): Free Stock Analysis Report
CABLEVISION SYS (CVC): Free Stock Analysis Report
LIBERTY MEDIA-A (LMCA): Free Stock Analysis Report
SIRIUS XM RADIO (SIRI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Charter Communications (NASDAQ:CHTR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Charter Communications (NASDAQ:CHTR)
Historical Stock Chart
From Jul 2023 to Jul 2024