Sharechat Logo

Sky earnings forecast cut by AspectHuntley

Wednesday 26th August 2009

Text too small?

Sky Network Television’s operating expenses are outpacing revenue growth with the launch of MYSKY HDi, weaker advertising and lower subscriber growth, prompting AspectHuntley to lower its 2010 profit forecast.

The research arm of Morningstar lowered its 2010 profit forecast to $103.6 million from $110 million for New Zealand’s dominant pay-TV company. It predicts revenue growth will be 5.1% in the current year, in line with the 2009 result, while expenses growth will slow to 3% from almost 12%.

“MYSKY HDi is constraining the firm’s profitability due to higher upfront investments,” the firm said. “This business should become more profitable as revenues ramp up. Consequently we remain optimistic about Sky’s longer-term growth outlook.”

Sky, which is 44%-owned by Rupert Murdoch’s News Corp., last week posted a 9.6% decline in full-year profit on costs for the introduction of its digital TV and high definition service.

Introducing high definition TV “introduced a new layer of fixed costs to the business” which would reap returns as subscribers migrate to the new services, chief executive John Fellet said.

Shares of Sky fell 1.1% to $4.48 and have gained 22% this year. AspectHuntley reiterated its `accumulate’ rating on Sky. The shares have an average ‘outperform’ rating, according to nine estimates compiled by Reuters.

The company is forecast to add about 30,000 subscribers this year, little changed from 2009, driven by demand for MYSKY, the research firm says.

Sky’s subscriber base grew by 30,326 subscribers, or 4.1% and the company’s services are now in 47.2 percent of New Zealand homes, it said. Advertising revenue fell 13.1% to $57.8 million. 

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Sky profit rises 16%
Daily ShareChat: Sky TV
Sky Network 1H profit climbs 19% as MYSKY start-up costs abate, sales grow
SkyCity profit surges 30% as debt buyback slashes interest costs; stocks gains
Sky City expects to make $70 million from sale of cinema businesses
Sky cuts losses, lifts sales
Sky goes from strength to strength
Sky picks up state TV channels
Seeing double on Sky TV
Sky notes launched