News Corp. Posts Lower Q4 Profit

NEW YORK: A $254 million loss from the sale of MySpace resulted in a 22-percent dip in News Corporation’s fourth-quarter profits to $683 million, but full-year net profit rose by 7.9 percent to $2.9 billion.

For Q4, revenues rose to $9 billion, with total segment operating income of $1.35 billion, a 45 percent increase, while for the year revenues rose to $33.4 billion and adjusted total segment operating income was up 12 percent to $5 billion.

“I’m pleased that once again News Corporation exhibited operational momentum in both the final quarter of fiscal 2011 and for the full year driven by significant increases at our market-leading Cable Network Programming and Television segments," said Rupert Murdoch, chairman and CEO. "While it has been a good quarter from a financial point of view, our company has faced challenges in recent weeks relating to our London tabloid, News of the World. We are acting decisively in the matter and will do whatever is necessary to prevent something like this from ever occurring again. It is important to note that there has been no material impact on our other operations. Our broad, diverse group of businesses across the globe is extremely strong today. The drivers of our businesses are intact, our position is strong and our future is promising. Our fundamental goals at News Corp are to produce sustained, meaningful value for shareholders, provide outstanding content and services to customers and consumers—and do it with integrity. These goals are interrelated and all three are critically important. And we will deliver on them.”

Cable Network Programming remains the biggest revenue contributor, with Q4 revenues up 15 percent to $2.2 billion, with segment operating income up 12 percent to $631 million. Full-year revenues were $8 billion, delivering an operating income that was up by 22 percent to $2.8 billion. Affiliate revenues gained 7 percent in the U.S. and 30 percent internationally in Q4, while ad revenues were up 23 percent in the U.S. and 20 percent internationally. For the year, affiliate revenues rose 10 percent in the U.S. and 20 percent internationally, and ad revenues gained 17 percent in the U.S. and and 22 percent internationally.

Filmed Entertainment reported fourth quarter segment operating income of $210 million on improved revenues of $2 billion, thanks in part to Rio and better results at Twentieth Century Fox Television, led by the growth of digital distribution revenue from library content and contributions from the Glee concert tour. Full year segment operating income however fell 31 percent to $927 million on lower revenues of $6.9 billion, largely as a result of difficult prior-year comparisons: notably Avatar and Ice Age: Dawn of the Dinosaurs.

Television revenues in the quarter rose 7 percent to $1.1 billion, with a segment operating income of $233 million, thanks to a stronger overall national advertising market and increased retransmission consent revenues, plus lower general entertainment programming costs primarily resulting from the absence of 24. Full year segment operating income more than tripled to $681 million on revenues that were up by 13 percent to $4.8 billion.

SKY Italia generated fourth quarter segment operating income of $145 million, compared to $97 million reported a year ago, with revenues up to $1 billion. Approximately 57,000 net new subscribers were added during the quarter for a total of 4.97 million subs.