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News Corp. (NWS), a media conglomerate whose colleagues include CBS (CBS), Disney (DIS), General Electric's (GE) NBC Universal, Time Warner (TWX), and Viacom (VIA), issued its Q3 report Tuesday after the bell. I thought things looked pretty good.
Net sales increased 19%, and net income calculated out to 32 cents per share; Bloomberg Businessweek says the expectation was for around 23 cents per share of profit. Very cool. If you reference the actual press release, you'll see that just about all the operating segments performed extremely well on a year-over-year basis.
Avatar, of course, helped the film division, which increased its operating income by over 70%. The television segment really rocked, going from a $9 million profit in last year's third quarter to a $40 million windfall this time around. Income at cable networks soared 38%.
Cash flow from operations over the last nine months jumped from roughly $1 billion to just under $3 billion. Speaking of cash, management may be inclined, according to this news source, to use some of its money to enhance dividends and perhaps repurchase shares.
The stock is currently down 4.5%, on strong volume, as I write this. Okay, there is some concern about the fourth quarter, as that Bloomberg Businessweek piece mentions, because of costs for content production.
However, I like News Corp. on the dips, and I think the weakness that is being seen today might be a buying opportunity. Right now, we've got a lot going on in the macro sense on the international stage, as Connie Madon has been following.
Please keep in mind, though, that there might be continued volatility to the downside in the overall markets, which in turn may affect any equity you buy, including News Corp. So if you are an extremely short-term trader, you may want to either stay on the sidelines or buy very selectively with specific hedging in place. Any stock purchase, including one involving News Corp., probably should come with a lengthy holding period in mind.
Disclosure: I own Disney, GE; positions can change without notice.
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Reader Comments (Page 1 of 1)
5-06-2010 @ 5:41AM
Dan Barnett said...
There are serious questions about Murdoch's (NWS) attempts to charge for (monetize) its' content when used on the internet. Additionally one of Fox' major personalities is shedding viewers and advertisers at an alarming rate. Then there is the whole question of the future of the print news medium.