Earnings Previews: News Corp.

News Corporation (NWS) is expected to report Q4 earnings after market close Tuesday, Aug. 5, with a conference call scheduled for 5:30 pm ET.

Guidance

Analysts are looking for a profit of 34c on revenue of $8.5B. The consensus range is 29c to 41c for EPS, and revenue of $7.87B to $9.1B, according to First Call.

Analyst Views

On July 21, a Citigroup analyst removed News Corp from its Recommended List. The firm removed the stock in light of its less optimistic view of the Media industry group and a 31% decline in the stock year-to-date. The analyst expects 2009 U.S. ad revenues of $287B, down 0.2% from 2008 expectations. As newspaper publishers suffer as companies cut spending due to the economic slowdown, the company's Sun newspaper has decided to lower its cover price to 30p from 35p; the Sun is now cheaper than its rivals, the Daily Mirror and the Daily Mail.

The Wall Street Journal reported on July 18 that If Microsoft (MSFT) tries to compete with Yahoo (YHOO) to buy Time Warner's (TWX) AOL, Yahoo may respond by abandoning AOL and seeking to buy News Corp's Web assets instead, an inside source said. Yahoo is said to be in contact with News Corp. about its Web properties, but the search engine's talks with Time Warner about AOL are more advanced, the source added.

Additionally, News Corp's MySpace social networking Web site may lay off 5% or more of its total staff. COO Amit Kapur confirmed that they are letting people go, but says these are "performance driven, not layoffs".

In television, chairman Rupert Murdoch said that he will invest $100M within the next 12 months to start six TV stations in regional markets in India under the STAR brand.