News Corp. Net Profit Down 24 Percent

NEW YORK: On revenues of $8.3 billion, News Corporation saw its third-quarter profit fall 24 percent to $639 million as compared with the same period in 2010, which included the release of the megahit Avatar.

"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," said Rupert Murdoch, chairman and CEO. "However, the great response to Rio and our confidence in our upcoming releases, indicate that the difficult comparisons in this segment over the past nine months are now behind us. 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. And our largest earnings generator, cable networks, increased earnings 25 percent on 13 percent revenue growth. I fully expect these vibrant businesses to continue driving future profit growth for News Corporation and to ensure our strength in the years ahead."

At the cable networks, revenues were $2 billion, with an operating profit of $735 million. The U.S. channels’ contribution to operating income gained 22 percent, while international gained 34 percent. The segment reported a 14-percent hike in ad revenues at its domestic networks, and an 18-percent gain internationally.

The Avatar-less filmed entertainment division had an operating income of $248 million, down from the year-ago $497 million, on revenues that fell from $2.4 billion to $1.6 billion.

The television segment, meanwhile, reported improved revenues of $1.4 billion, with a higher operating income of $192 million, as compared with $40 million last year.

SKY Italia, meanwhile, saw its revenues slip to $923 million and a smaller profit of $17 million.