News Corp. Q2 Earnings Preview

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News Corp., the global media company controlled by Rupert Murdoch, reports earnings for its fiscal third quarter on Thursday. The following is a summary of key developments and analyst opinion related to the period:

OVERVIEW: The company shuffled executives at its Los Angeles-based Fox properties, including the movie studio 20th Century Fox and the social networking site MySpace.

The shuffle was spawned by the February announcement of Peter Chernin’s departure as president of News Corp. He is starting a Fox-based movie production company later this year.

Peter Rice, president of “Slumdog Millionaire” distributor Fox Searchlight was promoted to chairman of entertainment, Fox Broadcasting. The movie and TV production departments were grouped under Jim Gianopulos and Tom Rothman, co-chairmen of Fox Filmed Entertainment.

News Corp. also added former AOL Chief Executive Jonathan Miller as chief digital officer. His appointment quickly prompted MySpace co-founder Chris DeWolfe to step down.

Analysts remain concerned about the company’s heavy reliance on the advertising market, which has declined steeply in the recession. It affects News Corp.’s TV stations, newspapers and Web sites.

In February, the advertising decline prompted News Corp.’s Wall Street Journal to trim about two dozen newsroom jobs.

BY THE NUMBERS: Analysts surveyed by Thomson Reuters expect a 15 percent decline in third-quarter profits to 15 cents per share. Revenue is seen falling 12 percent from a year ago to $7.72 billion.

ANALYST TAKE: Cowen and Co. analyst Doug Creutz recently raised his revenue estimate for the third quarter to $7.91 billion from $7.66 billion, but lowered his profit outlook to 13 cents per share from 16 cents.

The revision took into account worsening advertising trends at local TV stations, foreign exchange movements and a tougher time for newspapers. The forecast was offset by better movie studio expectations.

WHAT’S AHEAD: The company’s studio released “X-Men Origins: Wolverine” last weekend to an estimated $87 million debut, a strong showing that kicked off the summer movie season well. The results should show up in the fourth quarter and beyond.

STOCK PERFORMANCE: News shares declined 19 percent over the quarter. They closed at $7.70 on March 31, down from $9.48 on Dec. 31.

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