News Corp. reported improved earnings for its third quarter ended March 31, with its TV division that includes Fox Broadcasting posting an impressive 53% spike in consolidated operating income. Its TV, cable network programming, newspaper and information services segments all improved, though operating income at its big filmed entertainment – the Fox movie studio – was down despite some hit films.
In corporate results, News Corp. – which is led by Rupert Murdoch – posted net income of $2.7 billion, or 91 cents a share, which was inflated by a $1.7 billion tax-free gain sale of its DirecTV stake in a complex stock exchange with Liberty Media. A year ago, News Corp. earned $871 million, or 21 cents a share. Consolidated operating income – which excludes one-time transactions and better reflects core profitability – rose 16% to $1.44 billion, from $1.24 billion a year ago. Corporate revenue also rose 16% in the third quarter to $8.75 billion, from $7.53 billion.
Regarding the strong TV earnings, News cited “lower prime-time programming costs and advertising strength at the Fox broadcast network, improved results from MyNetworkTV and the positive impact of Super Bowl XLII at the television stations.” Lower program costs came from the now-settled Hollywood writers strike, which reduced TV program production earlier this year. The TV segment’s consolidated operating income was $419 million, from $273 million a year ago, reflecting the 53% rise. TV revenue advanced 15% to $1.80 billion, from $1.57 billion.
The cable network program segment posted a 17% hike in operating income to $330 million, from $282 million “despite launch costs for the Fox Business Network and the Big Ten Network,” News said. “Growth led by gains at the Fox News Channel, the Regional Sports Networks, FX Network and Fox International Channels.” Cable network program revenue rose to $1.27 billion from $998 million.
“We delivered growth from advertising based businesses, such as our television stations and broadcast network, and we delivered growth from subscription based businesses, such as our domestic cable channels,” News Corp. chairman and CEO Murdoch said in a statement. “We delivered growth from established businesses, such as our newspapers and we delivered growth from our developing assets, such as our international cable channels and Fox Interactive Media. Our ability to generate returns from a multitude of sources puts us in a great position to maintain our financial momentum even in times of economic uncertainty.”
For the nine months, net income rose to $4.26 billion, from $2.54 billion. Nine-month revenue advanced to $24.4 billion, from $21.3 billion.