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Television broadcasting industry

News Corp Shares Rebound on Positive Profit Expectations

Strategic Insights

— 2 min read

After a presentation by Mr Rupert Murdoch at a recent media conference, News Corp shares have gained momentum, with analysts now expecting a 25% profit improvement in the second quarter. This comes as the company's broadcasting business is expected to reach an equity-accounted net result of approximately $335 million, not including any contribution from the hit film 'Mrs Doubtfire', which is expected to contribute around $100 million this year.

The share price of News Corp has rebounded 51 cents to $9.76, with analysts noting that the company is still trading at a 10% discount to the overall market. Mr Murdoch's presentation highlighted the positive performance of various News Corp subsidiaries, including Star TV, which is expected to break even in 1995 after previously estimated losses of up to $US100 million a year.

Key Takeaways:

  • News Corp shares have rebounded 51 cents to $9.76 after Mr Murdoch's presentation.
  • Analysts now expect a 25% profit improvement in the second quarter, with an equity-accounted net result of approximately $335 million.
  • The company's broadcasting business is expected to contribute $180 million to the company's earnings this year.
  • Star TV is expected to break even in 1995, with previous estimates suggesting losses of up to $US100 million a year.
  • The BSkyB arm is expected to earn 180 million ($A391.3 million) this year, with 3.1 million subscribers at the end of November expected to grow by another 1.2 million this year.
  • Fox Broadcasting's American football contract is expected to lose $US50 million in its first year in 1995 and reach break-even by 1996.
  • The rival network CBS is said to be losing $US100 million a year on the NFL due to advertising rate declines.
  • Mr David Hill, the former head of News Corp's Sky Sports in England, suggested that Fox would expand the pre-game show each Sunday to an hour and it would be faster-paced.

Statistics:

  • News Corp share price: $9.76
  • Second-quarter profit improvement: 25%
  • Equity-accounted net result: approximately $335 million
  • Contribution from 'Mrs Doubtfire': $100 million
  • Star TV estimated loss: up to $US100 million a year
  • BSkyB expected earnings: 180 million ($A391.3 million)
  • BSkyB expected subscribers: 4.3 million (3.1 million + 1.2 million)
  • Fox Broadcasting's American football contract: expected loss of $US50 million in 1995

Sources:

  • "Sydney News Corporation" (no date)
  • "Smith Barney media conference" (no date)
  • "Standard & Poor's Corp" (no date)
  • "Fox Broadcasting" (no date)
  • "CBS" (no date)
  • "Mr Rupert Murdoch" (no date)

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