Liberty Interactive Corp. reported that earnings at its e-commerce business, which includes controlling interests in Backcountry.com and Bodybuilding.com, plunged in the second quarter as a result of legal settlements, increased spending in paid search as a percentage of revenue, increased promotional activity to move seasonal inventory, lower advertising revenue due to pricing and a shift to mobile applications and a management compensation arrangement to retain key personnel for transition purposes at one of our eCommerce subsidiaries.
Liberty said revenue at its e-commerce segment increased 13 percent to $391 million for the second quarter. Adjusted OIBDA decreased 36 percent to $23 million for the quarter and operating income decreased to a loss of $1 million. All but one of the company’s e-commerce businesses reported an increase in revenue for the quarter as a result of increased marketing efforts driving additional traffic and increased conversion resulting from site optimization and broader inventory offerings.
LIBERTY INTERACTIVE CORPORATION FINANCIAL METRICS | ||||||||||
(amounts in millions) | 2Q11 | 2Q12 | % Change | |||||||
| Revenue | ||||||||||
| QVC | ||||||||||
| US | $ | 1,232 | 1,280 | 4 | % | |||||
| International | 666 | 694 | 4 | % | ||||||
| Total QVC Revenue | 1,898 | 1,974 | 4 | % | ||||||
| eCommerce businesses | 347 | 391 | 13 | % | ||||||
| Total Liberty Interactive Revenue | $ | 2,245 | 2,365 | 5 | % | |||||
| Adjusted OIBDA | ||||||||||
| QVC | ||||||||||
| US | $ | 305 | 315 | 3 | % | |||||
| International | 113 | 123 | 9 | % | ||||||
| Total QVC Adjusted OIBDA | 418 | 438 | 5 | % | ||||||
| eCommerce businesses | 36 | 23 | -36 | % | ||||||
| Corporate and other | (4 | ) | (6 | ) | -50 | % | ||||
| Total Liberty Interactive Adjusted OIBDA | $ | 450 | 455 | 1 | % | |||||
| Operating Income | ||||||||||
| QVC | ||||||||||
| US | $ | 204 | 214 | 5 | % | |||||
| International | 77 | 87 | 13 | % | ||||||
| Total QVC Operating Income | 281 | 301 | 7 | % | ||||||
| eCommerce businesses | 19 | (1 | ) | -105 | % | |||||
| Corporate and other | (12 | ) | (10 | ) | 17 | % | ||||
| Total Liberty Interactive Operating Income | $ | 288 | 290 | 1 | % | |||||
