Rupert Murdoch will face calls from Wall Street to return more of News Corporation's multi-billion dollar cash pile to shareholders, as his media empire prepares to report a rise in profits to more than $750m.
Rupert Murdoch will face calls from Wall Street to return more of News Corporation's multi-billion dollar cash pile to shareholders, as his media empire prepares to report a rise in profits to more than $750m.
Analysts are expected to question News Corp executives on whether they plan to extend a share buyback programme that the company began to appease shareholders after the News of the World phone hacking scandal.
Since the programme started last July, News Corp has bought back $3.5bn of the $5bn it pledged. The plan is credited with helping to lift News Corp's share price to $19.28, and Wall Street is eager to see more.
"We believe that News Corp has the capacity and potential to return approximately $15bn of capital over the next three years or so," said David Bank, an analyst at RBC Capital.
Mr Murdoch is under pressure to appease investors, whose faith in the company has been shaken by the phone hacking scandal.
The row, which erupted last summer, forced Mr Murdoch to pull its pounds 8bn takeover bid for BSkyB, the broadcaster in which it already owns a 39pc stake, and has left News Corp's reputation severely battered.
Last month, MPs claimed Mr Murdoch was "not fit" to run an international company, while James Murdoch, his son and deputy chief operating officer of News Corp, was accused of "wilful ignorance". Both men face continued calls to step down.
Laura Martin, an analyst at Needham, which is forecasting a 13pc increase in profits at News Corp to $723m, said: "If Rupert Murdoch is not going to step down [as chairman or chief executive] then we want to know, is he going to sell out of the UK?
"I don't think it would affect News Corp's share price too much either way because he would get a good price for [the UK newspapers including The Times, The Sunday Times and The Sun] but shareholders want to know what he's going to do with them." On Tuesday, even Prince Alwaleed bin Talal, the Saudi billionaire who is News Corp's largest investor after the Murdochs and has long been one of their staunchest allies, admitted that the scandal was hurting News Corp's reputation.
However, the media giant's reputation is not the only cost of the scandal that the company is facing. At its last quarterly results, News Corp disclosed it had booked nearly $200m (pounds 126m) of costs, including legal fees, the cost of closing the News of the World, and settlements and payouts to phone hacking victims.
News Corp said at the time that it could not predict the final cost of the phone hacking and police bribery scandal, but the media business was expected to disclose a substantial rise in its bill at its results last night. Analysts expected profits to increase between 13pc and 19pc.
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