Qurate Posts Mixed Q3 Results

A tough third quarter still included a few bright spots for Qurate Retail, as the company continued to integrate its QVC and HSN businesses.

In the third quarter, Qurate posted a net loss of $770 million, or $1.85 per diluted share, versus net income of $72 million, or 16 cents per diluted share, in the period a year prior.

Adjusted net income was $177 million, or 42 cents per share, versus $169 million, or 37 cents per share, in the year-prior third quarter. A MarketBeat published analyst consensus estimate called for adjusted earnings per share of 34 cents for the third quarter.

Qurate posted total revenues of $3.09 billion compared to $3.23 billion in the year-earlier quarter. The QxH (QVC and HSN) division posted revenue of $1.85 billion versus $1.93 billion in the quarter a year previous. QVC International revenue was $650 million versus $640 million; Zulily revenue was $359 million versus $432 million; and Cornerstone revenue was $226 million versus $230 million in previous third quarter.

In the quarter, Qurate retail operating loss was $727 million as compared to retail operating income of $237 million in the period a year earlier. The QxH division posted retail operating income of $243 million versus $228 million in the year-previous quarter. QVC International operating income was $87 million versus $77 million; Zulily operating loss was $1.04 billion versus an operating loss of $38 million; and Cornerstone operating loss was $5 million versus an operating loss of $19 million in the period last year.

“The third quarter was challenging, with continued sales and adjusted OIBDA pressure at QxH and Zulily,” said Mike George, Qurate president and CEO. “However, we were pleased to see Cornerstone’s continuing operations turn to growth and a further acceleration of growth at QVC International. Despite the sales pressures, we generated strong growth in free cash flow. As we look ahead, we are intensely focused on improving our operating results, accelerating synergy capture and better positioning our companies for a changing retail and media world, while sustaining strong cash flow.”