News Corp. Profit Falls

NEW YORK, November 6: A weakened U.S. ad market, a smaller
theatrical release slate and a write-down of its investment in German pay-TV
platform Premiere were all cited by News Corporation as factors in the
29.6-percent first-quarter profit fall to $515 million.

The company recorded a 6-percent increase in revenues to $7.5
billion, but operating income was down 9 percent to $953 million.

In the Filmed Entertainment segment, revenues were down 20 percent
to $1.3 billion, while operating income fell 31 percent to $251 million. A
difficult prior-year comparison—which included the theatrical releases of
The Simpsons Movie and Live Free or Die Hard—was cited as
the reason for the decline. In addition, Twentieth Century Fox Television
reported decreased contributions versus a year ago, primarily due to lower
contributions from home-entertainment releases, most notably from 24, The
Simpsons, Family Guy and Prison Break.

At the Television division, there was a 15-percent fall in revenues
to $974 million, while operating income plummeted 70 percent to $54 million.
The company noted that improved results from MyNetworkTV were offset by lower
contributions from the Fox Television Stations and STAR.

The Cable Network Programming segment fared considerably better,
with revenues up 19 percent to $1.3 billion and an operating income of $379
million, reflecting a 31-percent increase. Among the highlights for this
segment was the increased contribution from Fox International Channels, with continued
advertising and affiliate growth in Latin America and Europe.

SKY Italia improved its revenues by 30 percent, to $969 million,
while operating income more than tripled to $165 million. The platform's
subscriber base at the end of the quarter stood at 4.6 million.

Commenting on the results, the chairman and CEO, Rupert Murdoch, said,
"I'm pleased that our cable group continues to perform extremely well, SKY
Italia remains a top performer and Fox Interactive Media is seeing revenue
growth even in the face of negative macroeconomic conditions around the globe,
including weak advertising markets. All media companies are being tested and
the year ahead will be difficult. I am confident that our long-term strategy of
cultivating diversified assets at different stages of development, judicious
investment of our capital and a strong balance sheet will guide us through
these difficult times."

—By Mansha Daswani