Liberty continues talks over DirecTV

John Malone’s Liberty Media Corp. said it had made progress in talks about swapping its stake in News Corp. for a stake in DirecTV Group Inc. or other assets owned by Rupert Murdoch’s global media conglomerate.

Liberty also reported Monday that it swung to a third-quarter profit, driven by gains across its units.

Liberty, based in Englewood, Colo., remains interested in acquiring News Corp.’s 38% stake in satellite television operator DirecTV or another asset on a tax-efficient basis, Chief Executive Greg Maffei said.

“While I’m not sure where our negotiations with News will take us, one of the elements of a DirecTV deal that is appealing is the flexibility we would have,” Maffei said.

Maffei said Liberty could have a significant influence on DirecTV by owning 38% to 39% without taking hard control of the satellite television provider.

Maffei’s comments came as Liberty reported third-quarter results for the parent company and its two divisions: Liberty Interactive Group, which consists largely of its holdings in home shopping network QVC, and Liberty Capital Group, which includes the cable network Starz Entertainment.

Liberty said it earned $63 million in the third quarter, compared with a loss of $94 million in the same period a year earlier.

Revenue grew to $2.1 billion from $1.85 billion.

The company said its Liberty Interactive unit earned $114 million, or 17 cents a share, as revenue grew 15%. Analysts had been expecting a profit of 11 cents a share, according to a poll by Thomson Financial.

Liberty said it expected revenue from Liberty Interactive to grow in the low double digits in the months ahead.

Liberty Capital recorded a loss of $51 million, or 36 cents a share. Analysts had been expecting a loss of 6 cents a share.

Maffei said the board had authorized the repurchase of an additional $1 billion of Liberty Interactive series A stock, a decision that came after Liberty repurchased 22.1 million shares in the third quarter.

Last month, News Corp. shareholders extended a “poison pill” anti-takeover measure that was first put in place two years ago when Liberty Chairman Malone took Murdoch by surprise and acquired a stake in News Corp. that today is about 19%.

Poison pill measures are designed to thwart hostile attempts to seize control of a company.

Shares of Liberty Media rose 66 cents to $22.60 on Monday.