News Corp posts $US2.5 billion profit, Shares move higher: Economy Roundup

News Corporation has managed to record a net profit of $US2.5 billion for the 2010 financial year, with a large proportion of that due to the success of blockbuster 3D hit film Avatar.

The result is a marked improvement from the net loss of $US3.4 billion recorded during 2009, which included a number of pre-tax impairment and other charges. Shares overnight rose over 3% to $US17.29.

Earnings before interest and tax was up 11% to $US4 billion, while chairman and chief executive Rupert Murdoch said in a statement the company was well positioned for growth over the next year.

“These results underscore just how well positioned we are – fiscally, operationally and strategically – for further growth across all of our markets.”

The company also said business segments have performed well, but direct broadcast satellite television and various other segments of the business have provided lower contributions.

However, Murdoch also said the company does have “significant” opportunity to expand, “including through taking advantage of the continual technological advances that will broaden the reach of our core content and distribution businesses”.

“So as we turn to fiscal 2011 and beyond, I am confident in our businesses and in our people to deliver superior results.”

Meanwhile, Vodafone Hutchison Australia has increased its customer base to 7.4 million users in the first-half of the year, the company announced. It also said revenue from downloading data on mobiles grew by 42.7% to $432 million in the first six months of the year, driven by smartphones.

Revenue from voice and data declined about $9 per user, with average revenue from each user down 14.6% to $53.48 because of a large take up in prepaid plans.

Tabcorp has recorded a 10% fall in net profit due to weak conditions in Victoria and Queensland.

The company announced net profit of $469.5 million for the year to June 30, down from $521.7 million recorded last year. Normalised net profit was down 3.8% to $477.3 million, with revenue flat at about $U4.22 billion.

“In 2010, we saw significant variations in the growth rates of the gaming markets in which Tabcorp operates. While recent trading shows improved activity levels, it is too early to be confident that all markets will return to growth this year,” Tabcorp chief executive Elmer Funke Kupper said in a statement.

“This will depend on an improvement in economic activity and discretionary spending. Our growth in market share puts us in a good position.”

Shares up after Wall Street rally

The Australian sharemarket has opened higher this morning following a solid night on Wall Street, where stocks have increased due to better-than-expected corporate earnings results.

The benchmark S&P/ASX200 index was up 27 points or 0.61% to 4569.8 at 12.25 AEST, while the Australian dollar was also up over US91c.

AMP shares have gained 1.5% to $5.46, while Commonwealth Bank shares gained 0.2% to $53.06. NAB lost 0.6% to $24.85 as ANZ rose 0.3% to $23.20.

In the financial sector, National Australia Bank has said it is still holding talks with the Australian Competition and Consumer Commission over its proposed $13.3 billion bid for AXA Asia-Pacific.

AXA entered a trading halt overnight, with speculation rampant that negotiations could soon be ending. However, The Australian Financial Review has reported a decision may not be made until August 11.

It is understood NAB is looking at a number of methods to have the deal approved, including splitting AXA’s platform to wealth management firm IOOF Holdings.

Prime Infrastructure Group has said its EBITDA for the half year will be in line with previous forecasts. It said in a performance update EBITDA before impairment charges in the 2010 financial year was $629 million, just under a forecast of $638 million.

“We have made significant progress during the quarter on several strategic priorities such as working towards resolving outstanding regulatory issues and progressing debt refinancing well in advance of maturities,” managing director Brian Kingston said in a statement.

Google moves ahead into social gaming with acquisition

Internet search giant Google looks set to move into social gaming by reportedly acquiring developer Slide for $US182 million.

As reported by TechCrunch, the deal will be announced later this week and is part of a strategy to create a games and apps network that will rival Facebook. It comes after Google invested several hundred million in Zynga last month.

Elsewhere in the US, stocks rose on Wall Street as investors grew confident about a number of positive financial results. Priceline shares rose 22%, with leather goods maker Coach climbing 5% as well.

The market was also given a boost by data from the Institute of Supply Management which revealed the services sector expanded at a faster pace in July, while payroll processing group ADP said employers added more jobs as well than in June.

The Dow Jones Industrial Average gained 44 points or 0.41% to 10,680.43.