LOS ANGELES (AP) -- News Corp. reports its fiscal first-quarter earnings after the market closes on Tuesday. Analysts are expecting higher earnings and revenue compared to a year ago, even as viewers find the fall TV season underwhelming.
WHAT TO WATCH FOR: Management will likely discuss audience weakness at broadcast network Fox, which could hurt advertising revenue, despite an up-draft from political ad spending.
Analyst Doug Creutz said in a research note Thursday that during the prime-time weeknight viewing hours, audience ratings are down 23 percent for returning shows and down 45 percent for new shows, compared to the shows they replaced last year.
Fox's "The X Factor" is down 26 percent on Wednesday nights and down 20 percent on Thursday nights. Even as the show receives new competition from NBC's "The Voice," there are signs that the music competition genre is fading in popularity. Other shows were also underperforming compared to a year ago.
News Corp. also owns pay TV networks such as FX and Fox News Channel, which may benefit from coverage of the U.S. presidential race. Such networks also lock in annual rate increases to distributors such as DirecTV and are less affected by changes in the economy.
WHY IT MATTERS: Advertising trends are a barometer of the economy's health. Companies that are healthy and expect more consumer spending will advertise more. News Corp. is also in the midst of a plan to split in two with a smaller part owning newspapers and its for-profit education venture and the other its TV and movie properties. The performance of its different segments reflect changes in consumer habits as technology changes.
WHAT'S EXPECTED: Analysts polled by FactSet expect News Corp. to earn an adjusted 37 cents per share on revenue of $8.15 billion.
LAST YEAR'S QUARTER: Last year, News Corp. posted adjusted earnings of 32 cents per share on revenue of $7.96 billion.