re: ncp - why down?? From Maquarie: 05 August 2004 NCP: Shares...

re: ncp - why down?? From Maquarie:

05 August 2004
NCP: Shares Sold Off On Wall Street

On Wall Street News Corporation’s American Depository Recepts (NCP.ADR) came under heavy selling pressure after the release of subsidiary, BSkys full-year result. NCP.ADRs fell to an Australian dollar equivalent of $11.65, which is 51c below where News Corporation shares closed on the Australian Stock Exchange (ASX) yesterday.

While BSkyB beat market consensus with a profit of £322m (+75% on last year), investors were told that profits would be under pressure for the next three years as marketing spend was ramped up. Management have made the decision to increase spending on marketing due to lacklustre growth in subscriber numbers. Subscriber growth has fallen below the 100,000 target for the past two quarters, with only 81,000 added in the June quarter.

BSkyB shares tumbled nearly 19 per cent to close at a five and a half-year low of £4.88 following the result.

This disappointing result comes one week ahead of the release of News Corporation&s full-year result on 12 August where Macquarie Research Equities (MRE) are expecting a reported earnings of $2,326.4 million, driven by growth in the film, Newspapers, Cable Network Programming and TV divisions, as well as reduced losses at Sky Italia. This result would represent nearly 29 per cent growth on last years reported earnings of $1,808 million.

Shares is News Corporation (NCP) are likely to be extremely volatile today when they resume trading on the ASX, creating potential opportunities for traders and investors.