Make us your home page
Instagram

HSN reports $2.9 billion fourth-quarter loss

The recession hit HSN Inc. full force, stalling the e-commerce company's turnaround.

The St. Petersburg parent of the nation's second-biggest TV shopping channel reported an 11 percent drop in sales for the quarter that included the Christmas holidays and a $2.9 billion loss as it wrote off goodwill carried on its books since going public last summer.

HSN's sales performance for the quarter that ended Dec. 31 was dragged down by a 25 percent sales collapse at its Cornerstone collection of mail order catalogs. Sales at the TV shopping network were down 4 percent, a bit worse than the rest of the broad, depressed general merchandise retail industry, but better than department stores. The company's dot-com business was up 4 percent, which is better than the online retail industry did during the holidays, and had grown to 28 percent of the company.

HSN shares have been all over the board since the IAC/InterActiveCorp set it off at $10 a share just before the fall stock market meltdown. Shares have traded as low as $1.61 and as high as $15, but after the writedown Tuesday were trading at $3.79, down 6 cents.

Despite the huge paper loss, HSN ended the quarter with $177 million in cash, remained in compliance with its debt restrictions and expressed confidence it can manage its way through the recession.

"We continue to believe that our unique business model at HSN and the changes that we are implementing at Cornerstone will enable us to weather the storm and in fact allow us to gain (market) share" from TV shopping rivals that all reported worse results for the holidays, said Mindy Grossman, HSN chief executive.

The company's market capitalization — what the stock market thought the company was worth — before Tuesday's earnings release was a scant $220 million, less than a tenth of what the network's book value was at the time it was spun off on its own last August.

In today's volatile stock market, many companies are facing similar massive writedowns to square their books with market reality.

Officials said the noncash writedown will not make it an easier target for acquisition by the likes of rival Liberty Media, which owns all of QVC and 30 percent of HSN, to buy the rest of the No. 2 TV shopping network. Liberty executives recently said they figured they would buy controlling interest in HSN "eventually." In HSN's breakaway agreement from IAC, Liberty agreed not to bid for controlling interest in HSN until at least May 2010.

For the full year, HSN reported losing $3.1 billion, vs. a net income of $170 million in 2007. Sales slipped 3 percent to $2.8 billion, down from $2.9 billion.

The company recently cut payroll by 250 jobs, reduced 401(k) matching contributions and froze pay. Cornerstone's management also has been overhauled.

HSN also announced hiring Brian Bradley, who previously headed the dot-com, call center and catalog operation at Circuit City Stores Inc., as executive vice president of HSN.com and Advanced Services.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Other earnings reports

Tech Data Corp.: The Clearwater IT distributor overcame a 12 percent drop in sales as cost cutting helped fuel a 17 percent increase in net income for the fourth quarter, which was helped by a tax benefit and the disposal of some subsidiaries. But even without those adjustments, profits were still up 4 percent. Its quarterly net income of $58.6 million, or $1.17 a share, compared with net income of $50.2 million, or 92 cents a share, a year ago. Net sales fell to $5.7 billion, compared with $6.5 billion in the year-ago period.

Sykes Enterprises: The Tampa call center company's fourth-quarter profit fell 19 percent due to higher taxes and a negative German tax court ruling. Net income declined to $7.6 million, or 19 cents per share, from $9.5 million, or 23 cents per share, a year ago. For the full year, profit increased 52 percent to $60.6 million, or $1.48 per share, from $39.9 million, or 98 cents per share, a year earlier. Revenue grew to $819.2 million from $710.1 million.

HSN reports $2.9 billion fourth-quarter loss 03/03/09 [Last modified: Wednesday, March 4, 2009 9:56am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Report slams Pinellas construction licensing agency and leaders

    Local Government

    LARGO — The Pinellas County Construction Licensing Board mismanaged its finances, lacked accountability and disregarded its own rules, according to a scathing report released Wednesday by the county's inspector general.

    Rodney Fischer, the executive director of the Pinellas County Construction Licensing Board, resigned in January.  [SCOTT KEELER   |   Times]
  2. A meatless burger that tastes like meat? Ciccio Restaurants will serve the Impossible Burger.

    Food & Dining

    TAMPA — The most red-hot hamburger in the nation right now contains no meat.

    Ciccio executive chef Luis Flores prepares an Impossible Burger Wednesday at the Epicurean Hotel Food Theatre in Tampa.
  3. Construction starts on USF medical school, the first piece of Tampa's Water Street project

    Health

    TAMPA — Dozens of workers in hard hats and boots were busy at work at the corner of South Meridian Avenue and Channelside Drive Wednesday morning, signaling the start of construction on the University of South Florida's new Morsani College of Medicine and Heart Institute.

    Construction is underway for the new Morsani College of Medicine and USF Health Heart Institute in downtown Tampa. This view is from atop Amalie Arena, where local officials gathered Wednesday to celebrate the first piece of what will be the new Water Street District. The USF building is expected to open in late 2019. [ALESSANDRA DA PRA  |   Times]
  4. Tampa Bay among top 25 metro areas with fastest growing economies

    Economic Development

    Tampa Bay had the 24th fastest growing economy among 382 metro areas in the country for 2016. According to an analysis by the U.S. Bureau of Economic Analysis, Tampa Bay's gross domestic product, or GDP, increased 4.2 percent from 2015 to 2016 to hit $126.2 billion.

    Tampa Bay had the 24th fastest growing economy in the country for 2016. Rentals were one of the areas that contributed to Tampa Bay's GDP growth. Pictured is attorney David Eaton in front of his rental home. 
[SCOTT KEELER | Times]
  5. Tampa Bay cools down to more moderate home price increases

    Real Estate

    The increase in home prices throughout much of the Tampa Bay area is definitely slowing from the torrid rate a year ago.

    This home close to Bayshore Boulevard in Tampa sold for $3.055 million in August, making it Hillsborough County's top sale of the month. [Courtesy of Bredt Cobitz]