Earnings Preview: News Corp. 1Q seen down

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NEW YORK -News Corp., the global media company controlled by Rupert Murdoch, reports earnings for its fiscal first quarter on Wednesday. The following is a summary of key developments and analyst opinion related to the period:

OVERVIEW: Murdoch, who controls more than a third of News Corp.'s voting shares, has been very vocal recently about making sure media outlets are paid appropriately for content that is consumed online.

He said in August that News Corp. plans to start charging at all of the company's news Web sites within the next year. News Corp.'s flagship newspaper, The Wall Street Journal, already charges for online access.

It also has a stable of dailies that include The New York Post, The Times of London and The Sun, a popular British tabloid.

The company is also seeking cash retransmission fees from cable and satellite operators that carry signals from its array of 27 U.S. TV stations that operate in its Fox and MyNetworkTV networks.

In the past, the company mostly overlooked such fees in a swap agreement to carry its cable networks, such as Fox News, but now it expects to be paid for all of its video signals.

New retransmission fees could provide a boost to earnings in the future.

BY THE NUMBERS: Analysts surveyed by Thomson Reuters expect a 10 percent decline in first-quarter profits to 18 cents per share. Revenue is seen falling 5 percent from a year ago to $7.16 billion.

ANALYST TAKE: Bernstein Research analyst Michael Nathanson has a "market perform" rating on the shares, with a $13 price target on Class A non-voting common stock.

He expects News Corp. to generate 86 cents per share of earnings in fiscal 2010, more if it is successful in renegotiating its retransmission agreements over the next few years as current deals expire.

WHAT'S AHEAD: The company's 20th Century Fox movie studio will release James Cameron's 3-D movie "Avatar" on Dec. 18. The studio is beginning to ramp up its already large efforts to promote the movie, including a blitz on football programs on Sunday.

STOCK PERFORMANCE: News shares rose 32 percent over the quarter. They closed at $11.96 on Sept. 30, up from $9.06 on June 30.

2009-11-02 19:54:52