News Corp.’s Earnings Sparkle Despite TV Slump

Q4 segment earnings at Fox’s global TV business fall 27%; segment profit rises 10% in cable-networks business.

Rupert Murdoch-led News Corp. reported robust quarterly earnings Tuesday, although it warned that its outlook is clouded as the general economy is getting weaker.

Segment earnings at Fox’s global TV business fell 27% while segment profit rose 10% in its cable-networks business in the quarter.

News Corp.’s fiscal year ends June 30, so Tuesday’s earnings are for its fiscal fourth quarter.

The media conglomerate reported that fourth-quarter earnings jumped 28% to $1.13 billion, or 43 cents per basic share, from $890 million (28 cents) a year ago. The per-share increase was slightly higher on a percentage basis because of retiring 530 million shares in its stock-swap sale of DirecTV to John Malone-led Liberty Media.

Excluding nonrecurring items, adjusted earnings rose to 35 cents per share, one cent higher than analyst estimates, compared with 31 cents per share reported a year ago.

Revenue rose 17 percent to $8.59 billion from $7.37 billion in the same three-month period one year earlier.

In fourth-quarter TV, operating profit fell to $279 million, or 28%, due to “lower contributions from Fox Television Stations, STAR (satellite TV in Asia) and Fox Broadcasting.” However, full-year TV segment profit rose 17% “due to improved Fox Broadcasting results and reduced loses from MyNetworkTV, partially offset by lower (TV) station and STAR contributions,” the company said.

In a conference call with analysts, company brass said its owned TV stations face a “highly challenged” environment due to weak automotive, telecommunications and financial-services advertising.

After posting a 10% gain in fourth-quarter profit, the cable-network-program segment improved 16% for the full year “despite losses associated with the launch of the Fox Business Network and Big Ten Network.” Lifting the segment were profit gains at Fox News Channel, regional sports networks and overseas channels.

For the full fiscal year, net income soared 68% to $1.81 per share, or net income of $5.4 billion. Full-year revenue climbed to $33 billion from $28.6 billion.

In a statement, CEO Rupert Murdoch noted that the results represented the sixth consecutive higher fiscal year. “All of our business segments generated year-over-year gains, with record profits reported at our satellite-broadcasting, cable-programming, film and television businesses,” he added.

Murdoch continued, “Although we clearly face more challenging macroeconomic conditions in fiscal ’09, we’re well-positioned to deliver continued, if somewhat less robust, growth. Our balance sheet is strong, we have solid operating momentum in many of our key businesses and, most important, our assets are diversified.”