EARNINGS PREVIEW: US Media Firms' TV Units Show Their Worth
January 27 2012 - 4:40PM
Dow Jones News
TAKING THE PULSE: Wall Street forecasts stronger results from
most U.S. media companies after higher ad sales and some bruising
fights over cable-licensing rights delivered more revenue in the
fourth quarter. The networks are also spending more themselves,
with Fox, CBS and NBC agreeing to pay 65% more to broadcast
National Football League games over the next nine years, according
to The Wall Street Journal.
Content providers have worked hard to protect their margins
through online distribution deals and "TV Everywhere" options that
give consumers access to films and series at the same cable-TV
prices. Such agreements are needed to help offset a second year of
declining box-office receipts.
COMPANIES TO WATCH:
Viacom Inc. (VIA, VIAB) - Feb. 2
Wall Street Expectations: Analysts see a $1.06-per-share profit
and $3.99 billion in revenue. A year earlier, Viacom reported a
$1-per-share profit with $3.83 billion in revenue.
Key Issues: Viacom's core results are expected to continue their
growth streak as rising ad revenue and improving ratings at MTV
networks boost the top line. The media giant's Paramount movie
studio also raked in more than $500 million from the latest
"Mission: Impossible" blockbuster, but the lion's share of
box-office sales fell in the current quarter, while most of the
movie's promotional costs weighed on the company's upcoming
results.
Walt Disney Co. (DIS) - Feb. 7
Wall Street Expectations: The Street projects a
71-cent-per-share profit with $11.19 billion in revenue. A year
earlier, Disney reported a 68-cent-per-share profit and $10.72
billion in revenue.
Key Issues: Disney's namesake studio faces an uphill battle
trying to beat its year-earlier results, but sales of consumer
merchandise like its Marvel comics products will offset some of
that shortfall, according to a note from Needham & Co. Sports
heavyweight ESPN will continue to power Disney's cable business.
The company's theme parks have delivered better-than-expected
revenue in recent quarters, defying skeptics who warned that weak
U.S. job growth would cut down on visits.
News Corp. (NWS, NWSA) - Feb. 8
Wall Street Expectations: Analysts polled by Thomson Reuters
project a profit of 34 cents a share with $8.93 billion in revenue.
A year earlier, the company earned 24 cents a share, or 29 cents
excluding restructuring costs and other charges, with $8.76 billion
in revenue.
Key Issues: News Corp. punctuated a year of hotly contested
cable-licensing battles across the media industry by reaching a
detente with satellite provider DirecTV Group Inc. (DTV). The
company also has negotiated higher retransmission fees with U.S.
broadcast stations, which should drive stronger revenue. News Corp.
owns Dow Jones & Co., the publisher of this newswire.
Time Warner Inc. (TWX) - Feb. 8
Wall Street Expectations: Analysts call for 87 cents in earnings
and revenue of $8.09 billion. The company's year-earlier profit was
68 cents a share, or 67 cents excluding items like investment gains
and prior-year write-downs, on $7.81 billion in revenue.
Key Issues: Time Warner has spent the past year working to
expand the reach of HBO Go, the online version of its pay-TV
service, an effort that should help protect its margins by
broadening the channel's appeal at little extra cost. The company's
film business should benefit from strong home-video sales from the
end of the "Harry Potter" franchise and the latest iteration of
"The Hangover."
CBS Corp. (CBS, CBSA) - Feb. 15
Wall Street Expectations: Analysts are projecting a per-share
profit of 53 cents with $3.91 billion in revenue. A year earlier,
the company reported a 41-cent-per-share profit, or 46 cents
excluding restructuring and debt-extinguishment charges, on $3.9
billion in revenue.
Key Issues: CBS has notched modest revenue improvements for most
of the past year as syndication deals for older shows like "Cheers"
complement healthy ad sales from its existing primetime lineup. A
growing international audience has proven especially profitable. At
the same time, the company's fourth-quarter results will face tough
comparisons after it reported an even more lucrative syndication
deal for "CSI" a year before.
(The Thomson Reuters estimate and year-ago figures may not be
comparable due to one-time items and other adjustments.)
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
andrew.fitzgerald@dowjones.com
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