News Corporation (NWS) is a vertically integrated media company, well-diversified geographically and operationally across all major markets and media platforms. The company reported 2Q08 net income of $832M, or EPS of $0.27, broadly inline with consensus estimates, compared with net income of $822M or EPS of $0.26 in 2Q07.
Consolidated revenue in 2Q08 was $8.6, up 9.5% y/y, compared with $7.8B in 2Q07. Operating income for the Television division at $245M (up 119% y/y) was a highlight of the result, driven by improved results from the FOX Broadcasting Company, MyNetworkTV and STAR.
We maintain our Hold recommendation at current levels. We have valued News Corporation on a forward price/earnings (P/E) basis, as well as a comparison to similar firms in the media/entertainment sector. We believe the company is well-positioned to exploit growth opportunities in both cable and direct broadcast satellite television, and apply a multiple of 19x fiscal year 2008 EPS of $1.16 to derive a six-month target price of $22.
Read the full analyst report on NWS.
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