news corp looks expensive, page-2

Nonic,

The Operating income performace for the 6 months to 31 Dec was good, up to US$2,465M from US$1,995M.

Bottom line effected by reduction in:

- Affiliates - down to $196M from $492; and
- Other, net - down to $187M from $446M

The decrease in affiliates is explained by :

"Second quarter net losses from affiliates were $50 million versus net earnings of $249 million in the same period a year ago. The $299 million decrease was primarily driven by lower contributions from BSkyB due to the write-down of its ITV investment."

This is probably a one off. Similiarly, the credit for other net in the prior year appears to have been a one-off credit. Consequently comparisons at the bottom line appear to be distorting the very healthy operation growth picture.

Macquarie Equities have forecast NWS earnings as:

2008 - 125.4
2009 - 153.5
2010 - 166.0

With a 12 month price target of A$33.43

Regards

SP