News Corp. beats expectations
News Corp.’s fiscal fourth-quarter earnings jumped 27% on profit from the sale of assets, as well as higher operating earnings in its film, cable networks and newspaper units.
Chairman and Chief Executive Rupert Murdoch said in a statement that the company faces "more challenging macro-economic conditions" in the current business year that will lead to "somewhat less robust growth."
The New York-based media conglomerate, which owns Twentieth Century Fox, Fox News Channel and Dow Jones & Co., publisher of The Wall Street Journal, said net income in the quarter ended June 30 rose to $1.13 billion, or 43 cents per share, from $890 million, or 28 cents per share, a year ago.
Excluding one-time items, earnings rose to 35 cents per share, from last year’s adjusted result of 31 cents per share.
That was a penny higher than the 34 cents per share analysts had been expecting, according to Thomson Financial.
Part of the per-share jump came because News Corp (NWS, Fortune 500). had about 530 million fewer shares outstanding at the end of June than it did a year ago, after executing a $10.1 billion share repurchase as part of its deal to sell its stake in satellite-television operator DirecTV to John Malone’s Liberty Media (LINTA).
That deal also delivered $625 million in cash to News Corp. in the last fiscal year. In the second quarter, the sale of the company’s stake in Fox Sports Bay Area and Gemstar-TV Guide International boosted earnings.
The previous year’s per-share figure of 28 cents is an aggregate of results from each of the company’s two classes of stock. The year-ago earnings were equivalent to 30 cents for each Class A share and 25 cents for each Class B share. The company did not break out this year’s result across share classes.
Revenue rose 17% to $8.59 billion from $7.37 billion last year, and was higher than the $8.15 billion Wall Street expected cash advance flexible payments. Strong gains in film, newspapers and cable were partially offset by declines at its television and interactive units.
Lower ratings at the Fox broadcast network led to a decline in advertising revenue, which delivered a 28% decline in earnings at the television unit. Fox-affiliated stations also struggled as advertisers shifted spending to the Internet.
Higher ratings and ad revenue at Fox News Channel lifted the cable networks unit to a 10% increase in profit. Fox Business Network, started last year, delivered a loss, but News Corp. did not specify the amount.
The company also said its Fox Interactive Media unit, which includes social-networking site MySpace.com, had lower operating income. It blamed the decline on higher development and technical costs. Search and advertising revenue increased.
News Corp.’s newspaper publishing unit got a boost from the inclusion of Dow Jones, which it bought last December. Dow Jones added $24 million in operating income. Higher circulation and ad revenue at its Australian papers also pushed earnings higher.
DVD sales of the company’s movies - including "Juno" and "Alvin and the Chipmunks" - helped the film unit’s operating income more than double.
SKY Italia reported sharp increases in subscribers, which helped the satellite-TV unit post a 37% increase in operating income.
Separately Tuesday, News Corp. announced it and private equity firm Permira Advisers LLP raised their offer to buy out public shareholders of News Corp.’s subsidiary NDS Group PLC. The British company, which makes technology for pay-TV services, has agreed in principle to accept the new offer.
Filed under: legal by Fred