Disney, Meredith, News Corp, Pandora and More Media Wall St. Reports 8-10-12

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After two weeks of blistering news -- both good and bad -- of media firms on Wall Street, this week was relatively quiet, with fewer firms reporting (and making waves).

Pandora
The music keeps on playing for Pandora (P). The streaming audio leader reported July audience metrics with hours increasing 76% year over year, active listeners up 48% and share of U.S. radio at 6.13% (versus June's numbers). These numbers came in slightly ahead the estimates of J.P. Morgan's Doug Anmuth, prompting him to write, "We're encouraged by Pandora's consistent strong usage growth, even with competition from Spotify and other services, and continue to believe the company is on track to take share of the ~$17B traditional radio ad market." He's overweight on the stock.

Priceline
Well, Priceline.com (PCLN) investors named their price and it was starkly lower (-15%) from where the stock closed before it announced its earnings. 2Q results actually beat estimates with a tough macro backdrop, but investors were more concerned about the Internet travel agency's forward guidance, which came in weak. Anthony DiClemente gave five factors behind PCLN's conservative guidance: 1) European weakness, 2) expectations of further worsening, 3)FX headwinds, 4) tough price competition in particular markets and 5), difficult y/y comps.

J.P.Morgan's Bo Nam also believes "most of the softness is driven by macro and therefore, we do not view current trends as thesis-changing." Europe's weakness, and the law of large numbers (PCLN books 50M hotel room nights a quarter now), have proven to have caught up to the Internet juggernaut. All in all, though, while DiClemente is lowering his price target ($725 from $800), the analyst believes the Priceline.com thesis remains intact.

Disney
There was nothing amusing about Disney's (DIS) quarterly numbers. The diversified media company put up $1.01 in EPS, $0.08 ahead of the Street consensus. Led by Marvel's The Avengers, Studio Entertainment was responsible for most of the upside and should bolster downstream revenues like DVD, syndication and consumer product sales in the future. U.S. Parks margins grew by 220 bps (vs. 190 bps estimate). Needham's Laura Martin was really impressed with the fact that Disney's $1.1B investment in Cars Land took the theme park's attendance up to 50% (from 25%) of total California attendance.

If there's any concern for the quarter, Nomura's Michael Nathanson believes its affiliate fee growth based on something CEO Bob Iger said during the Q&A section of the call. Nathanson also thinks investors might be concerned that the firm's own internal intrinsic value measures might have been tripped by a strong stock. That could be why the firm ended up "only" buying back $373M in F3Q, way down from the $800M+ the company had been averaging. In a note to investors, the analyst explained both issues away and didn't see a reason for concern.

News Corp
News Corp (NWSA) reported quarterly financials this week and they came relatively inline with the estimates of Credit Suisse's Spencer Wang. Total revenue of $8.4B decreased 7% y/y and was 1% higher than the analyst's $8.3B forecast. Management did say that the firm expected "high single digit to low double digit growth" in EBIT as it continues to work on a solution to split the company into two entities, Media and Publishing. The good performance and outlook promoted Wang to raise his PT $3 to $23. He's still Neutral on the shares.

Meredith Corp
Deutsche Bank analyst Matt Chesler published on Meredith Corp's (MDP) by looking at industry circulation trends. According to the analyst, headline ABC circulation for the six months ending June 30th "shows an industry with stability on subscriptions, but persistent weakness at the newsstand." He's relieved to see MDP growing modestly given "recent awful ad pages trends." Total circulation for the 15 ABC-audited Meredith titles rose 0.7% (vs. -3% 6 months ago). He rates MDP a HOLD with a $30 target.

Interpublic
We haven't seen a whole lot of upgrading in this market and this week's upgrade of Interpublic Group of Companies (IPG) comes from Nomura analyst Michael Nathanson. He believes new IPG investors can benefit in two ways: 1) IPG's multiple hasn't been this low compared to the market since the early 2009 recession and 2) he doesn't see much further EPS downside. With an "untapped" balance sheet, the firm has various earnings levers (like stock buybacks and debt retirement). Nathanson is taking the stock up to a Buy rating with a $13 PT.

Demand Media
Demand Media (DMD) reported second quarter results that topped expectations. Net revenue, adj. EBITDA, and adj. EPS of $89M, $25M, and $0.09 all beat Mark May's (Barclays analyst) estimates of $85M, $23M, and $0.07. Management again raised its full year estimates for 2012 and now expects $355M-$359.5M of net revenue. May raised his estimates on the back of better-than-expected earnings and management's updated guidance. His price target is now $13, up from $10.

DISH Networks
Higher subscriber acquisition costs kept Dish Networks' (DISH) earnings somewhat muted this quarter. The satellite firm paid $806 per gross subscriber, coming in higher than the Street's conservative $793. DISH has been marketing the Hopper, a more expensive set-top box (STB) which has pushed SAC up consequently. Total revenue ($3.572B) also came in a bit short of Stefan Anninger's (an analyst at Credit Suisse) estimates ($3.669B). Lower ARPU and the closure of Blockbuster stores contributed to the shortfall.

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