With most of the big names in the media/tech space reported, it’s been an up and down earnings season. There have been some hits and some misses. There’s been some positive guidance and some suspect. Now three of the remaining big names have reported their performances. Summing them up, here’s the tally from News Corp., Marvel Entertainment and Time Warner:
|NEWS CORPORATION EARNINGS|
There is a little repetitious tedium to tracking earnings news. The numbers change but it’s often otherwise the same process, usually similar sounding stock soundbytes. One of the exceptions to the rule is usually News Corp. With globally diverse holdings across all media (Dow Jones, Sky Italia, Times, MySpace, Fox etc), the company is a barometer for the entire media industry. Their reports shed light across multiple markets including print, film, internet and TV. They’re also colorful. Few earnings announcements are overseen, hands on, by an executive as candid and informed as Rupert Murdoch. You don’t, for example, typically find the Chairmen of comparable companies answering analyst questions on line-level details during an earnings call. With Rupert Murdoch you often do.
Tuesday, News Corp released their Q4 and year end earnings. For the quarter, earnings were up 27% to $1.13b or 43 cents a share. For the same period last year the company earned 28cents.
Adjusted to exclude special items, earnings for the quarter were 35 cents a share, up from 31 cents last year. Analysts were expecting 34 cents.
For the fiscal year the company earned 5.38b or $1.81 a share, up from $1.09. Full year revenue wsa $33b, up 15% year over year.
Contrary to results turned in by Viacom and CBS, which saw the impact of a weaker global ad market effect local and national sales, News Corps diversified portfolio of properties held up well. In fact, the company announced earlier in the week that they will likely invest more heavily in Germany, Eastern Europe, India and possibly China.
Speaking from Beijing where he’s on hand to attend the Olympics, Murdoch said the growth in India is “really extraordinary” and that in China, he’d like “to be doing more.”
The company plans to spend $60m-plus to invest in Indian TV and other market initiatives. Dow Jones will also introduce a tracking index to cover the Indian Stock Market.
Other News Corp info by the numbers:
FILMED ENTERTAINMENT - the group reported operating income fo $220m, up from $106. For the full year, op. profit was up to $1.25b.
TELEVISION – Q4 operating income was $279m, down by $106 or 28%. The shortfall, “reflects lower contributions from Fox Television, Star and Fox Broadcasting.” For the full year, segment income was up 17%.
CABLE NETWORKS – op income was $313 for the quarter, a $29m improvement year over year. The Full year tally was $1.3b, a 16% increase. Op Income for Fox News was up 14% for Q4 and 35% for the year.
NEWSPAPERS – Op Income for the quarter was $262m and $767m for the year. The full year growth rate was 17% thanks to Dow Jones and also, Australian growth. In the six months to the end of June, Wall Street Journal online (WSJ.com) audience was up 87.9%.
FOX INTERACTIVE MEDIA – Revenues of $225m, 23% year over year gain. Op. Income was $6m, down from $24m last year.
Looking ahead, in guidance, company operating income is expected to rise four to six percent in 2009. 2008 showed growth in the mid teens.
|MARVEL ENTERTAINMENT EARNINGS|
With strong box office showings for internally developed films Iron Man and The Incredible Hulk, expectations were high. This was the first earnings period to include results from the self-produced, and creatively financed, movies.
The results revealed Tuesday easily beat expectations. Guidance was adjusted upwards too. In an odd twist, however, the stock was punished. (It gained back half of its losses on Wednesday). Turns out, analysts and the markets were more optimistic than the company and were seeking even higher upward adjustment.
Earnings for Q2 were up 61% to $46.7m or 59 cents a share. That’s up from $29.1 or 34cents for the same period last year. Revenue climbed 55% to 156.9m. Analysts were calling for 45cents a share on revenue of $131.
$28.9m of Marvel’s revenue came from the two new hits. Even though they’ve grossed upwards of $750m at the box office, the bulk of income from the movies won’t be recognized until later quarters.
Other numbers: the licensing business saw a 54% spike in earnings and a sales increase of 45%.
In guidance Marvel is projecting earnings in the range of $1.55 to $1.75 a share on revenue in the range of $450 to $480m. The company previously raised the range in May from $370m to $400. Analysts have, according to the most recent estimates, been more optimistic and were expecting guidance to be reset at about $1.96 a share on revenues of $543m.
|TIME WARNER EARNINGS|
In the news lately as much for blocking former AOL chief Jonathon Miller from joining Yahoo’s board of directors (due to a non-compete agreement), Time Warner took headlines today for announcing a long overdue plan to split AOL’s dial up and advertising businesses into two parts. The separation is expected to happen by early 2009 and could pave the way for the sale of the dial up component.
In earnings, which were also announced, AOL’s drag on growth was apparent. (Shares have lost nearly 2/3rd of value since AOL and Time Warner joined in 2001’s $124b deal).
Overall, the company reported income of $792 or 22 cents a share for the second quarter. That was down 26% from $1.07b for the same period last year. Adjusted, earnings were in at 24 cents a share. Revenues were up 5% to $11.56b.
Analysts expected earnings of 23cents on revenue of $11.45b.
Year ahead, the company is forecasting earnings from operations in the range of $1.07 to $1.11.
Divisional info by the numbers:
AOL – revenue was off 15% to $1.05b. Operating income fell from $350m to $230m. Ad revenue up 2%. 604k customers were lost during the quarter.
FILMED ENTERTAINMENT – Revenue up 14% to $2.6b. Earnings up 16%.
NETWORKS – Revenue up 9% to 2.8b. Ad revenue up 11%.
PUBLISHING – Revenue down 6% to $1.2b. Ad revenue down 10 %. Earnings off 11%.
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