Market Overview

TV Station Revenues to Exceed Q4 Estimates (NWS, VIA, DIS)


Analysts at Oppenheimer indicate that revenues at TV stations are likely to rise in Q4 and might exceed the estimates comfortably. Moreover, the broadcast scatter seems to be broadly sold-out at significantly higher rates than the upfront.

According to Oppenheimer, News Corp (NYSE: NWS)(FREE stock trend analysis) is likely to achieve TV station growth, as compared to the prior expectation of a 10% decline. The trends are expected to improve through FY10, aiding NWS’ performance. Moreover, the FOX network is likely to benefit from “higher scatter ad-sales pricing and double-digit ratings growth,” Oppenheimer adds. The analysts have raised their Television EBIT estimates for F2Q by $29 million and for FY10 by 41%.

Meanwhile, Viacom (NYSE: VIA) has released its Paranormal Activity DVD in Q4, as compared to the expected 1Q10 launch. Oppenheimer believes that VIA may not benefit from stronger scatter rates until mid-to-late December. Oppenheimer has raised its Film EBIT estimate for FQ4 and FY09 by 33% and 57%, respectively.

Although TV station results may be stronger than expected across the industry, Walt Disney (NYSE: DIS)(FREE stock trend analysis) is unlikely to benefit from this trend due to headwinds resulting from a decline in ratings. Moreover, DIS’ box office results have been weak so far in the quarter. Oppenheimer believes that the performance of Parks and Studio would improve in 2H10. Moreover, Orlando STR data has also indicated that DIS’ profitability will improve after 2H10, when promotions abate.

Posted-In: OppenheimerAnalyst Color Long Ideas News Analyst Ratings Trading Ideas


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