Goldman Sachs says satcaster may struggle to meet earnings forecasts
LONDON — BSkyB’s stock has fallen following a warning by U.S. investment bank Goldman Sachs that the satcaster may struggle to meet its earnings forecasts.
In a note to investors the bank said: “We are increasingly concerned with Sky’s need to invest to cope with a more competitive environment, and the payback of its broadband investment…
“These worries are accentuated by reports of comments by Rupert Murdoch…that broadband losses could push 2007 operat-ing profits to £650 million ($1.2 billion) versus our £785 million ($1.5 billion) forecast.”
BSkyB’s stock was trading at £5.22 ($5.22) Friday midday (GMT) — the previous day the stock slipped 6 pence (11 cents) to £5.25 ($10.05).
Meanwhile Virgin topper Richard Branson’s verbal attack on Sky shows no sign of abating. Branson is furious because Sky’s purchase of a 17.9% stake in ITV has derailed an ITV merger with NTL, which he part owns. NTL will be rebranded as Virgin Media next year.
He claims Sky’s stake in ITV is “damaging democracy” and that BSkyB and ITV are already holding talks on joint bids for sports and film rights.