SYDNEY — Shares of the News Corp Ltd. surged in Australia Monday following comments by chairman and chief executive Rupert Murdoch on forthcoming second-quarter earnings and other recent corporate developments.
According to local media reports, Murdoch, speaking at a media conference in California last week, tipped a 25% rise in second-quarter earnings due in early February for an equity-accounted net result of about $ A335 million ($ 230 million).
By midday Monday, News Corp was up 44 cents or 4.51% at $ A10.20 (about $ 7) with turnover of more than 1.56 million shares.
Murdoch also said Fox Broadcasting’s recently acquired contract for the rights to four years of National Football League games would lose $ 50 million in its first year in 1995 but break even in 1996 — better than expectations.
Many analysts had considered the $ 1.6 billion bid for the NFL’s National Conference games too high and were uncertain how much the games would cost Fox.
“It’s good to hear it straight from the horse’s mouth. It puts to rest many people’s concerns and fears,” said media analyst Lachlan Drummond of CS First Boston Australia.
He linked the jump in News Corp.’s shares directly to Murdoch’s comments.
Murdoch also said Hong Kong-based satellite television broadcaster Star TV would lose less than $ A20 million (about $ 14 million) in 1994 and break even in 1995. News Corp. has a 63.6% stake in Star, which reaches 38 countries.
In mid-October, Murdoch told the company’s annual meeting Star would lose $ A 50 million-$ A100 million ($ 34 million-$ 69 million) over the next one to two years before turning a profit.
Murdoch added that Star’s recent purchase of 49.9% in Hindi language broadcaster Asia Today of Bombay, which broadcasts Zee TV, was earnings positive.
U.S. broker Smith Barney hosted the media conference.