News Corp. Expects Dow Jones Deal to Close in 3-4 Months
Media Giant Reports Financial Results for Fiscal Q4, Full-Year 2007
By Jon Hemingway -- Broadcasting & Cable, 8/8/2007 3:09:00 PM
News Corp. released financial results for its fiscal fourth quarter and full-year 2007 and provided an update of the Dow Jones transaction.
Consolidated revenue in the fourth quarter rose 8.6% to $7.37 billion from $6.82 billion. Operating income rose 18% to $1.2 billion from $1.03 billion. Net income rose 4.5% in the quarter to $890 million from $852 million.
Revenues from the television segment grew 6.7% in the quarter to $1.434 billion, while operating income was down 4.4% to $385 million. The lower OI was due to losses from MyNetworkTV and lower results from Fox television stations and Star.
Cable-network-programming revenues were up 17% to $1.095 billion, while operating income was up 46% to $284 million on higher contributions from Fox News Channel, regional sports networks, FX and Fox International Channels.
Direct-broadcast satellite revenues rose 15% to $865 million, while operating income rose 84% to $155 million on subscriber growth at Sky Italia.
Filmed-entertainment revenues were down 18.5% to $1.45 billion and operating income slid 47% to $106 million, reflecting difficult theatrical comparisons versus 2006.
Full-year revenues increased 13% to $28.655 billion from $25.327 billion in fiscal 2006. Operating income rose 15% to $4.45 billion while net income rose to $3.426 billion from $2.314 billion.
In July, News Corp. secured enough voting power from the controlling Bancroft family to acquire Dow Jones in a $5.6 billion deal. The deal is seen as a boon to the company’s new Fox Business Network, which will launch Oct. 15 to a minimum subscriber base of 31 million based on current distribution deals.
The company said it hopes to close the acquisition of Dow Jones within the next three to four months. Once complete, News Corp. plans to divest Dow’s local newspaper assets and expand the coverage of The Wall Street Journal in Asia and Europe and to include more nonbusiness topics.
In a conference call Wednesday afternoon, Murdoch called the CNBC contract -- under which WSJ reporters appear regularly on the network -- “an obstacle,” but he said the company was not negotiating a buyout. The contract runs through 2012 but covers business topics only, the company noted, leaving opportunities open elsewhere.
News Corp. said the initial investment into the channel will be $150 million-$200 million, and it expects to break even “within a couple of years.”
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