GLOBAL media group News Corporation has performed "below expectations" in the first quarter. Now analysts are questioning whether the group is still on track for a 20 per cent profit rise.
Mr Rupert Murdoch, the group's chairman and chief executive, told shareholders yesterday that this was still possible.
He also unveiled a more conservative approach to financing new acquisitions.
"I am on record as saying that we expect a 20 per cent increase in profit for the year," he told a packed News Corp annual meeting in Adelaide yesterday.
"We still expect that and are still aiming for that during the coming year. However, I should say that the first quarter may not be quite up to those expectations, but we will certainly be striving to make up any shortfall," he said.
But analysts are now more sceptical about the 20 per cent profit pledge.
"If they can't meet expectations in the first quarter, when they have those strong revenues from Independence Day. then what hope do they have of getting 20 per cent in the full year?" asked one Sydney-based media analyst, referring to a hit Hollywood movie made by News Corp's Fox studio.
In the 1995/96 year ended June 30th, News Corp's net profit slipped to $1.02 billion Australian from $1.37 billion in 1994/95.
Mr Murdoch said revenues at the Fox US television business had begun 1996/97 slowly because of the Atlanta Olympic Games, the rights to which were held by a rival network.
Australian newspaper revenues would be flat in 1996/97.
But he remained buoyant about the British operations, saying the advertising market there was booming and the partly-owned BSkyB pay television operator was growing strongly.
He then unveiled a more cautious strategy for financing future expansion.
"As far as possible, we will finance them (News expansion plans) out of current cash flow."
Mr Murdoch also said he intended to use sports broadcasting rights as a "battering ram" for dominance of pay television markets throughout the world.
He said the purchase of those rights would also buy his way into the world's sporting establishment.
"Sport absolutely overpowers film and everything else in the entertainment genre," he told shareholders.
