News Corp. Reports Robust Earnings in Fiscal Q2

TV Operating Income More than Doubles

By Michael Malone -- Broadcasting & Cable, 2/5/2008 12:02:00 PM

News Corp. reported second-quarter net income of $832 million, up from $822 million in the second quarter a year ago.

Consolidated operating income for the quarter was $1.4 billion, up 24% from the $1.1 billion reported a year ago. That was based in large part on the $74 million improvement from News Corp.’s satellite-TV segment.

Chairman and CEO Rupert Murdoch called it the highest operating-income quarter in company history and singled out the balanced nature of the earnings, including “double-digit growth at nearly every operating segment.” “Domestically, the strength of our broadcast-network and cable assets has enabled us to capitalize on the current advertising market,” he added, “while at the same time, we continue to ramp up affiliate revenues across our cable channels. And our Internet platform is now delivering real profits from locked-in search revenues, as well as from advertising-revenue growth as a result of our hypertargeting initiatives.”

Filmed entertainment reported second-quarter operating income of $403 million, down from $470 million a year ago.

Television reported operating income of $245 million, more than double the $112 million reported a year ago, thanks to a stronger performance from Fox Broadcasting, MyNetworkTV and STAR. Fox Broadcasting reported that second-quarter operating results nearly doubled from the quarter a year ago thanks to “increased advertising pricing in conjunction with strong network ratings for primetime and sports programming.”

The Fox Television Stations reported a 16% decline for the quarter, due to decreased political advertising, “a decline in Major League Baseball revenues from the absence of the Divisional Series and one League Championship Series and decreased advertising revenues” at MNT stations.

Cable-network programming reported second-quarter operating income of $337 million, a 23% jump from the second quarter last year. Fox News Channel, for one, reported operating-income growth of 47% thanks to “higher affiliate revenues on increased rates and additional subscribers.”

Finally, satellite TV announced operating income of $62 million, well up from the $12 million loss a year ago, thanks to more than 400,000 net subscribers added over the past year.