EARNINGS PREVIEW: US Media Cos May See Ad Recovery Continue
October 27 2010 - 3:44PM
Dow Jones News
TAKING THE PULSE: Diversified media companies are expected to
post quarterly results close to year-earlier figures, although the
advertising market continues to improve from a sharp downturn
during the recession. Prices in the broadcast television ad market
were reported to be up 30% in September, at the start of the fall
season, from two months earlier, as political-ad demand has been
strong. Ad-revenue growth is likely to be especially stout at
cable-television networks. Even the number of ad pages in
long-struggling U.S. magazines inched up in the third quarter, the
second growth period in a row.
Meanwhile, through Oct. 24, 2010 box-office revenue was up 3.4%,
to $8.65 billion, on higher ticket prices, including 3-D
surcharges, although attendance slipped 2.2%, to 1.1 billion,
according to Hollywood.com. Two studio chiefs recently reported the
DVD sales market is stabilizing after a sharp downturn in 2009.
COMPANIES TO WATCH:
Time Warner Inc. (TWX) - reports Nov. 3
Wall Street Expectations: Analysts surveyed by Thomson Reuters
anticipate the media conglomerate to report earnings of 53 cents a
share on revenue of $6.41 billion, compared with 55 cents and $6.55
billion, respectively, a year earlier. The 2009 results include AOL
Inc. (AOL), since spun off.
Key Issues: Time Warner saw first-half strength in its film
business and networks segment, which includes Turner Broadcasting
and HBO. But its struggling news network CNN has replaced its
leader and is shuffling the prime-time lineup to try and stem
viewership loss. Chief Executive Jeff Bewkes has said Time Warner
may look for acquisitions in emerging markets.
News Corp. (NWSA) - reports Nov. 3
Wall Street Expectations: The owner of Dow Jones & Co.,
publisher of this newswire, is seen posting fiscal first-quarter
earnings of 24 cents on revenue of $7.42 billion, compared with 22
cents and $7.2 billion, respectively.
Key Issues: News Corp. has predicted adjusted profit growth for
the current year, likely led by its cable outlets, which have been
boosted by the popularity of Fox News. Meanwhile, the company is in
a heated fight over payments to television stations it owns from
Cablevision Systems Corp. (CVC) that has impacted its New York and
Philadelphia outlets for a week and a half.
CBS Corp. (CBS, CBSA) - reports Nov. 4
Wall Street Expectations: The broadcaster and outdoor-ad company
is projected to earn 31 cents on revenue of $3.37 billion in its
third quarter, compared with year-earlier earnings of 30 cents and
revenue of $3.35 billion.
Key Issues: CBS, which relies on advertising for nearly
two-thirds of its revenue, may see little improvement because of
fewer ads going to national and local broadcasts and syndicated TV.
The company, which continues to cut costs and pay down debt, also
is negotiating for higher fees from cable and satellite providers
that retransmit its channels.
Viacom Inc. (VIA, VIAB) - reports Nov. 11
Wall Street Expectations: Analysts forecast earnings of 69 cents
on revenue of $3.29 billion, while a year earlier, the owner of
such cable TV channels as MTV and Comedy Central reported a profit
of 76 cents on revenue of $3.32 billion.
Key Issues: Viacom is expected to benefit from ad-revenue growth
at cable channels, which account for most of its profit. Audience
ratings also are growing, especially at MTV, which has a hit show
in "Jersey Shore." Some analysts have said deals with cheap rental
providers could cannibalize long-term results at Paramount
Pictures, distributor of "Iron Man 2."
Walt Disney Co. (DIS) - reports Nov. 11
Wall Street Expectations: The company is seen posting fiscal
fourth-quarter earnings of 46 cents a share on revenue of $9.94
billion, compared with 47 cents and $9.87 billion,
respectively.
Key Issues: The largest U.S. media company by market value is
expected to benefit from strong international box-office and
consumer-products sales for "Toy Story 3." The prior-year quarter
included an extra week, which could hurt theme-park comparisons.
Strong growth is likely to continue at the ESPN cable network,
which is expanding internationally.
(The Thomson Reuters estimate and year-earlier figures may not
be comparable due to one-time items and other adjustments.)
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com
(Nat Worden contributed to this article.)
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