Oct. 30 (Bloomberg) -- Liberty Media Corp. said third- quarter profit dropped at its QVC home-shopping unit as the credit crunch slowed consumer spending and more customers missed payments on QVC-issued credit cards.

Tracking shares for the Liberty Interactive unit, which includes QVC, dropped 23 percent. Liberty Interactive fell $1.48 to $4.90 at 4 p.m. New York time in Nasdaq Stock Market trading and has lost 74 percent of its value this year.

QVC's business overseas began to slow last year, and sales deteriorated in the U.S. in August and September, QVC Chief Executive Officer Mike George said on a conference call today. Profit was also hurt by inventory gluts and a rise in bad debt, since 27 percent of QVC's sales are paid for with company-issued credit cards, George said.

``We're clearly seeing our customers become more cautious,'' George said. ``We're not seeing erosion in customer retention, but they are making one or two fewer purchases.''

Sales at QVC fell 2.7 percent to $1.64 billion in the third quarter, Englewood, Colorado-based Liberty said in a statement. The unit's operating income before depreciation and amortization declined 14 percent to $312 million, Liberty said.

QVC drew down its remaining bank credit facilities to buy back $782 million worth of Liberty Media bonds due next year, the company said. The move will reduce the amount of debt Liberty must pay or refinance in 2009 to $140 million, said Chief Executive Officer Greg Maffei, 48.

Liberty Chairman John Malone, who sold 4.5 million shares of the company's Liberty Capital tracking stock this month, said on the call that he isn't under any financial pressure that would make him sell more. He also sold 1 million shares of Liberty Global Inc., which sells pay-TV services outside the U.S.

Malone's family has never pledged shares of the super-voting stock that lets him control Liberty Media as collateral for a loan, Malone said. The family has $50 million in debt, offset by at least that much in liquid assets, he said.

``We had to sell to pay down short-term debt,'' said Malone, 67, adding that he hated to sell because he had to pay taxes on the sale. ``We just got squeezed.''

To contact the reporter on this story: Jennifer Sondag in New York at jsondag@bloomberg.net.

Last Updated: October 30, 2008 17:05 EDT