News Corp chairman, Rupert Murdoch wasn’t saying much about much at all on the telephone this morning, especially about his ambitions for the Wall Street Journal, in commentary after the release of the company’s third quarter results.
Nor was he very precise about what he might do next after selling out of Fairfax ahead of the merger which took place yesterday.He didn’t rule out a deal here but didn’t actually say whether he was looking at anything. He and his executives have already indicated to investors they think the Ten Network, currently on the market, is over priced.He said Fairfax’s merger with Rural Press had increased the size of the company and it no longer needed “our help” in its defence.
“So we’ve just moved on. And we’ve taken our money back plus a little bit of foreign exchange profit.” He wouldn’t talk about Austar and Foxtel (25 per cent owned) merger talks, now called off.News bought the stake in Fairfax in October for $360 million and sold it on Monday for $380.25 million.
He made it clear on the tele conference that people should not read anything about News’ future ambitions in Australia in the Fairfax sale.
But Murdoch was a bit more upbeat about News Corp which saw a 6.2 per cent rise in ‘net income to$US871 million ($A1.05 billion)or 27 cents a share, from $US820 million ($A990 million), or 26 cents, a year earlier.Sales rose 21 percent to $7.51 billion, beating the average analyst estimate of $6.73 billion. News reaffirmed its full-year earnings guidance of a 14 per cent to 16 per cent rise in annual operating income, above the previous financial year’s record of $US3.9 billion.
News said higher earnings from film and Fox News offset a drop in earnings from Fox TV which has been hurting despite the success of American Idol.
News Corp’s operating income for the third quarter of $US1.2 billion ($A1.45 billion) was up 23 per cent on the previous corresponding period.
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With retail sales going gang busters, including food sales by supermarkets, Coca-Cola Amatil believes it will manage to keep up with ‘single digit’ growth expected in earnings as the strong start to 2007 continues.
Food retailers performed well in the retail sales figures for March released this week and judging by results for industry leader, Woolies, there’s no sign of that slackening (although Coles gives lie to that statement!)
But CCA told shareholders at the AGM in Sydney that the strong start to 2007 in Australian, New Zealand and Indonesia and in its new premium beer business, Pacific Beverages, was continuing.
CEO Terry Davis told the meeting that single digit growth in earnings before interest and tax (EBIT) was expected this year.
“For the first half of 2007, we expect to be able to deliver high single digit EBIT growth,” he said.
“And, based on a continuation of the current trading environment, I believe a similar EBIT growth rate is achievable for the 2007 full year.”
The company, particularly its Australian, New Zealand and Indonesian businesses, had witnessed solid trading conditions for the first four months of the year.
“Both Australia and New Zealand have maintained volumes broadly in line with last year,” he said.
“We have seen solid trading conditions across most markets for the first four months with the momentum generated in the second half of 2006 generally continuing into 2007.
“Both Australia and New Zealand have maintained volumes broadly in line with last year, a significant achievement given both countries are cycling high volume growth from the first quarter 2006 launch of Coca- Cola Zero.
“Revenue per unit case growth has been on budget, driven by improvements in both mix and rate.
“Indonesia has also enjoyed a strong start to the year driven by continuing volume growth combined with solid recovery of cost of goods increase.”
He said CCA’s South Korean business, which is on the sale block as part of last month’s strategic review, had “maintained a good price discipline”.
And Pacific Beverages premium beer business, which could be expanded to become the country’s third brewer, was also well ahead on last year, according to Mr Davis.
“Pacific Beverages also has made a good start with premium beer sales showing encouraging momentum during the Easter period, with results well ahead of last year,” Mr Davis said.
Pacific Beverages is a joint venture with the world’s second largest brewer, SABMiller, and includes plans to start brewing local versions of international beers such as Miller, Peroni Nastro Azzuro and Pilsner Urquell.
“SPC Ardmona has experienced a solid start to the year and expects to generate modest earnings growth in the first half. This is despite the impact of a short fruit season for 2007, a result of the drought and the frost damage incurred in 2006, and higher tinplate costs, Mr Davis said in his address.
He said the sale process for the South Korean business was going well.
“CCA released an information memorandum in March for its sale and this has generated sufficient interest from local and international players for CCA to now consider the sale of the South Korean business.
“A short list of bidders has been established and they are now in stage two of due diligence. We would expect to have the next round of offers for the acquisition of the business to be reviewed by the CCA Board in mid June.”
Finalisation of South Korea will go a long way to convincing major investors that CCA’s strategic plan is on track and the company will execute as it has promised.
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The intense competition in the Australian telecommunications market has taken a toll on the bottom line of Optus, the local arm of Singtel.
Optus yesterday revealed, after some working out, that net earnings fell 11 per cent in the year to March 31.
Optus said its bottom line rose to $804 mill
