Cable TV Buoys News Corp. Profit ; Quarterly Earnings Show How Murdoch's Empire Has Become a Mixed Bag

By Chozick, Amy | International Herald Tribune, February 8, 2013 | Go to article overview

Cable TV Buoys News Corp. Profit ; Quarterly Earnings Show How Murdoch's Empire Has Become a Mixed Bag


Chozick, Amy, International Herald Tribune


The company had net profit of $2.38 billion in the last three months of 2012, up from $1.06 billion a year earlier.

Strong growth at News Corp.'s cable channels FX and Fox News and at regional sports networks in the United States helped the company more than double its net profit in the three-month period that ended Dec. 31, offsetting lingering costs related to a phone-hacking scandal and the cost of a planned split of the media conglomerate into two publicly traded companies.

On Wednesday, News Corp. reported net profit of $2.38 billion, or $1.01 a share, for the period, which was the second quarter of its financial year, compared with $1.06 billion, or $0.42 a share, a year earlier. The gains rested largely on an 18 percent increase in revenue at the company's cable network segment. Over all, revenue rose 5 percent, to $9.43 billion.

During a conference call with analysts, Chase Carey, News Corp.'s president and chief operating officer, said the company would complete its separation into two companies by the end of its 2013 financial year. Fox Group will include the company's cable channels, 20th Century Fox studio and Fox Broadcasting. The company's newspapers, including The Wall Street Journal and The New York Post, its Harper Collins book publishing unit and a suite of Australian pay-TV assets will make up a new, slimmed-down company called News Corp.

The second-quarter results highlight how disparate Rupert Murdoch's media empire has become -- with its cable channels making up more than 60 percent of the company's overall profit. Its publishing business, while stronger than last year, continues to be affected by industrywide weakness.

News Corp. has faced problems at its British tabloids, which have been the subject of a continuing investigation into phone hacking and the bribing of public officials. The costs associated with the scandal appeared to have temporarily waned. The company's gains in the quarter were partly offset by the $56 million spent on investigations related to the closing of News of the World, compared with $87 million spent a year earlier.

The publishing division reported modest improvements from a year earlier: Mr. Carey gave credit in part to the transformation to digital storytelling. The introduction of the Sunday edition of The Sun in Britain contributed to a $16 million increase in operating profit, to $234 million. Ad revenue at the company's Australian papers dragged on the division.

But the real driver of News Corp.'s growth came from its cable channels, which reported operating profit of $945 million, a 7 percent increase from the previous year. …

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