SWS Media Team Meeting Agenda 3/14/07

  1. Industry/Company updates by associates
  2. Update on our mentor(s)
  3. Reminder: send updates to media team mailing list so the whole team can read them
  4. Company Profiles
  5. For next week: (instead of updates) Listen to part of an earnings call or shareholders meeting of one of your companies. Email a briefwrite-up on what was talked about during the part of the earnings call you listened to, and what questions were asked by the analysts (see Walt Disney, Comcast, are all on there.

Media Industry Updates – 3/13/07 (Nicole)

CABLE/TV COMPANIES

Time Warner Cable (TWC)

  • Price currently at $36.46 compared to $36.69 last week
  • TWC and Spring launch a wireless venture in Ohio; will be doing so in NC and TX
  • John Martin (TWC Executive VP/CFO) announced that the company will try to expand its “triple-play” business by offering wireless services
  • 3 main areas of focus: commercial telephony, advanced advertising, and wireless service
  • Talk about consolidation is likely to start next year… cable companies such as Cablevision (NY) and Cox Communications (Atlanta) are possible targets

Comcast (CMCSA)

  • $25.51, down from $26.14 last week
  • Comcast recently increased its capital expendictures because “’people are buying our new products in record numbers’ [CEO Brian] Roberts said. ‘We’re selling 50,000 phone subscriptions a week’” (
  • Despite increasing capital expenditures, the company still plans to buy back stocks

DirecTV (DTV)

  • $22.50 compared to $22.69 last week
  • Study showed that professional home theater installers nationwide tend to prefer DirecTV over other cable companies for its picture quality and overall television experience
  • Struck deal with MLB that DirecTV would air its out-of-market package of games for 7 years – although it is argued that the deal is exclusive and would be unfair to people who use other systems. MLB argues that it will offer terms to other companies on terms like those of DirecTV

Nexstar (NXST)

  • Price at $8.35 compared to $7.50 last week

------

Music/ Entertainment Update: (Kavita)
Sony: still a lot of focus on PS3 - Sony recently announced a plan to cut
the costs on PS3, which caused the stock price to rise last week.
Digital Music Group: 4th quarter earnings just released - reported a jump in
revenue from 0.6 mil to 5.5 mil, which caused a sharp jump in the stock
price. price fell again after though, and now is lower than it was before
the earnings report.
Meredith Corporation: no major news, stock price has been fairly steady
Regal Entertainment: last week announced really high dividend of $2/share.
recently has been focusing on expanding 3d and big-screen capabilities,
announced a joint venture with imax to accomplish this. stock price has
fallen fairly steadily over the last coupe weeks.
National CineMedia: announcing 4th quarter earnings next monday. since the
stock made its ipo so recently this should give a better idea of where the
stock is heading.

------

Media Industry Update: Karen

DreamWorks Animation SKG (DWA)

In the last 5 days the price of the stock has been extremely volatile. It has fluctuated many times between a high of $27.10 and a low $26.20 and ended at $26.35 (as of closing on March 6th). On Tuesday February 27th, DreamWorks Animation SKG reported their 4th quarter and full year 2006 financial results. The company reported a loss of $21.3 million (20 cents a share) as a result of Flushed Away. Though it was very well received by critics, in contrast to On the Hedge which was released earlier in the year, Flushed Away didn’t live up to expectations. It had a mediocre performance at the box office that brought the overall year reported revenue for 2006 to $394.8 million with a net income of 15.1 million (15 cents per share). The company is excited for this year’s movies. Shrek 3 is being released May 18, 2007 meaning the large part of the companies earnings will come in the latter half of the year. The films second movie Bee Movie will be released in November. Jerry Seinfeld is the writer, producer and director of the film. However, most of the revenue from this film won’t be realized until 2008. This idea of releasing 1 original film and 1 sequel is the firm’s new strategy in order to mitigate the risk. They plan to do this in 2008 as well with a sequel to Madagascar and a new movie called Kung Fu Panda. In addition Chief Financial Officer Kristina Leslie is expected to step down. DreamWorks intends to take their time finding the right replacement

article on earnings call

to listen to earnings call

The Walt Disney Company (DIS)

In the last 5 days the price of the stock has been very volatile but overall rose from $33.50 to $34.70 (as of closing on March 6th). Walt Disney announced that they will release their “Fairy Tale Collection”. It’s their first ever line of designer wedding gowns. Disney is trying to carry over the success of their parks into the consumer products division. They are attempting to breakthrough the age barrier by showing people in their twenties that Disney can still be “cool”.

Tying the Knot with Disney

Conscience

News Corporation (NWS)

In the last 5 days the price of the stock dipped from $23.70 to $22.57 and then rose back up to $23.38 (as of closing on March 6th). News Corporation has recently become vocal about people placing copyrighted material onto YouTube. Also, News Corporation is currently working on online distribution of its content. They might soon allow their MySpace members to embed Fox TV Shows and other Fox Videos onto their home pages. This development would not only vastly increase distribution, but would also greatly increase their revenue through advertisements. Seeing as, according to ComScore, they draw more traffic than any other website, allowing Fox videos to be embedded could have enormous benefits.

D’oh! More Homer Simpson on MySpace

It appears that the recent bobbles in the stock market have made many of the media stocks volatile. Their stock prices have been jumping around however any actual effect will not be realized until they steady themselves.

Resources:

Google finance, Yahoo finance

BASIC COMPANY PROFILE SHEET

NAME OF COMPANY:______TICKER______

MARKET CAP: ______COMPANY SIZE______

VALUATION METRICS:

P/E Ratio: ______PEG (Prospective Earnings Growth)______

EPS (Earnings per share)______Book Value ______

Free Cash Flow______

QUALITATIVE MEASURES:

HOW DOES COMPANY X MAKE ITS MONEY?

______

MAJOR COMPETITORS: ______

BARRIERS TO ENTRY: ______

THREAT OF SUBSTITUTES? ______

SUPPLIER POWER: ______

POWER OF THE BUYER:______

BASIC COMPANY PROFILE SHEET PAGE 2

POTENTIAL FOR FUTURE GROWTH ?

DOES COMPANY X HAVE A COMPETITIVE ADVANTAGE IN THE INDUSTRY?

LONG-TERM OR SHORT-TERM INVESTMENT?

______

PRELIMINARY RECOMMENDATION: buy sell hold buy at ___