QVC SURPASSES $1B
Byline: Vicki M. Young
NEW YORK — The integration of its QVC cable television and iQVC internet business helped produce double-digit profit growth and pushed QVC’s revenues above the $1 billion mark in the fourth quarter.
QVC’s parent, Comcast Corp. Monday reported income of $777.7 million, or 80 cents a diluted share, compared with a $181.6 million loss, or 24 cents, in the year-ago quarter. Total revenue was up 24.9 percent, to $2.41 billion from $1.93 billion.
With QVC and iQVC operating together, the $1 billion milestone was reached 12 days before the end of the quarter, which coincided with the end of the calendar year.
QVC’s operating cash flow was up 24.4 percent, to $201.2 million from $161.7 million in the comparable 1999 quarter. Revenues were $1.12 billion, or an increase of 13.5 percent, from $990.7 million.
Brian L. Roberts, president of Comcast, said in a statement: “The fourth quarter was QVC’s best ever. Our domestic electronic retailing operations generated revenue growth of 17.1 percent and operating cash flow growth of 28.1 percent, with improved gross profits and operating margins. In the fourth quarter, QVC achieved its best sales day and week ever, selling $55 million of merchandise in just one day, powered by 22,000 units of a Pentium III computer that generated $42 million in sales.”
For the year, Comcast reported $2 billion, or $2.13 a diluted share, in net income versus $1 billion, or $1.30, in 1999. Total revenue reached $8.2 billion compared with $6.5 billion in 1999.
QVC’s contribution for 2000 was $3.54 billion in revenue, an 11.6 percent increase from the $3.17 billion posted in 1999. Operating cash flow increased 14.9 percent, to $619.2 million from $538.8 million.
For 2001, Comcast said it expects QVC to generate consolidated revenue growth in the low double-digits and consolidated operating cash flow growth in the low to mid teens, excluding the results of its start-up channel in Japan. QVC will launch its QVC/Japan operation in April through a joint venture with Mitsui. The operation is expected to report an operating cash flow loss of between $30 million and $35 million for the year. On a consolidated basis, QVC expects to invest $150 million to maintain and extend QVC’s warehousing and distribution facilities and information systems in the U.S., Germany and the U.K., as well as launch QVC/Japan. Capital investment in Germany and Japan represents 50 percent of the $150 million capital investment.
In addition to the QVC commerce division, Comcast also has a cable division, content properties such as the E! Networks and a business communications operation.