News Corp. Net Down Despite TV, Cable Gains

Movie revenue can't stack up after Avatar
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Gains at News Corp.'s TV business were more than offset by lower income at its filmed entertainment segment during the third quarter.

Net income was $639 million, or 24 cents a share, down from $839 million, or 32 cents per share, a year ago, including a $125 million charge for settling litigation against its Integrated Marketing Services unit, the company said Wednesday.  Excluding non-recurring items, earnings per share were down from 29 cents a share.

Revenues dropped to $5.3 billion from $5.8 billion.

"As we anticipated, News Corporation's third-quarter financial results faced challenging comparisons when set against last year's record Avatar contribution at our Filmed Entertainment business," Rupert Murdoch, CEO said in a statement. "Looking beyond our film business, I am delighted with the continued and significant operational momentum of our channels businesses, with their market-leading positions across the globe. I'm particularly pleased that our Television segment, viewed by the market just one year ago as a challenged business, more than quadrupled its earnings contributions over the prior year quarter on the strength of the national advertising market, increased retransmission consent revenues, and the popularity of our programming."

Murdoch added that cable networks were the company's biggest generator of earnings, with profits growing 25% to $735 million on a 13% gain in revenue.

"I fully expect these vibrant businesses to continue driving future profit growth for News Corporation and to ensure our strength in the years ahead," he said.

Operating income for News Corp.'s domestic cable channels was up 22%.  International cable channels were up 34%.

At the domestic channels, affiliate revenue grew 10% and advertising revenue rose 14%, led by pricing and ratings growth at FX.

Operating income at News Corp.'s television segment rose to $192 million from $40 million. Revenues were up 2% thanks to the Super Bowl and a stronger advertising market. There were also lower expenses thanks to the end of the series 24 and lower costs for American Idol.

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