News Corp says it sees no signs of US slowdown

News Corp has not seen signs of a business slowdown due to US economic weakness and the company is in good shape to withstand the Hollywood writers strike, its chief operating officer said on Wednesday.

Peter Chernin's comments at an investor conference came hours after Goldman Sachs analysts published a research note warning investors to beware of various parts of the media sector in 2008, especially if the US economy goes into recession.

Shares of Rupert Murdoch's News Corp rose 3 percent to close at $19.23 on the New York Stock Exchange, outperforming a 1.5 percent rise in Time Warner Inc as shares in Viacom Inc, CBS Corp and Walt Disney Co fell. News Corp shares fell back to $18.93 in after-hours trading.

"We are seeing no signs of any slowdown in our business," Chernin said at a Citi conference in Phoenix, Arizona, adding the company was "not unmindful" of wider economic troubles.

"Obviously we live in the world, and Rupert lives in the world, and God knows I'm sure everybody here is buzzing about the economy and where we're headed," he said in a presentation broadcast over the Web.

Goldman expects News Corp's television revenue growth to beat its peers because of the Fox Network's rights to the 2008 Super Bowl and stronger ratings momentum coming into the year.

But it lowered its estimate of News Corp's calendar year earnings before interest, tax, depreciation and amortization (EBITDA) to 10 percent annual growth from 13 percent, saying it expects revenue growth to slow in several divisions, including TV and cable networks, newspapers, film and interactive media.

"We continue to believe News Corp's business units can drive double-digit long-term EPS growth as they remain undermonetized relative to their peers," Goldman analyst Anthony Noto wrote.

News Corp, which bought Wall Street Journal publisher Dow Jones & Co Inc for $5.6 billion last year, owns a global empire of newspapers, cable and satellite broadcasters and online media such as the MySpace social networking website.

Chernin said the company continues to rely on older forms of media to generate steady cash, which it wants to invest in areas it considers ripe for growth in the next 5 to 10 years.

Two broad areas in which News Corp is interested are digital properties and developing markets, such as Asia, the Middle East and Latin America, Chernin said.

Chernin also said News Corp was in good condition, along with most other networks, to withstand the strike by members of the Writers Guild of America for "a period of time."

About 10,500 screenwriters are striking against major studios over how writers should be paid for work distributed on the Internet.

Agencies

(China Daily 01/11/2008 page16)