News Corp. Profit Flat in Q3

NEW YORK: Profit at News Corporation was flat in the third quarter at $2.72 billion, as compared with $2.69 billion in the year-ago period, on revenues of $7.37 billion, which were down 16 percent.

"Our third-quarter results directly reflect the continuing weakness of the global economic climate," said Rupert Murdoch, the chairman and CEO of News Corp. "Despite this tough environment, we have proven resilient in several key areas this quarter. Our cable network programming segment showed remarkable growth, led by the FOX News Channel, which nearly doubled its operating income over the year-ago quarter. Filmed entertainment saw its earnings increase in the same period and I am encouraged by our upcoming slate of movies this summer. We improved our already solid cash position, adding another $2.4 billion to our cash balances during the third quarter, which includes cash received from the completion of the NDS transaction. We continued to make necessary operational adjustments to ensure our businesses are performing at optimum levels. We are working daily to increase market share and strengthen our core businesses, even in this very challenging environment."

Filmed entertainment revenues fell 9 percent to $1.5 billion, with an operating income that gained 8 percent to $282 million. The improvement reflects increased contributions from Twentieth Century Fox Television, with U.S. syndication revenues up from How I Met Your Mother and Boston Legal, and international sales revenues up for The Simpsons and 24.

Television revenues took a 29-percent hit, falling to $1.3 billion, while operating income plummeted from $415 million to $4 million. The company recorded decreased operating results at Fox Television Stations, FOX Broadcasting and STAR. At the local stations, operating income fell 72 percent. At FOX Broadcasting, meanwhile, there are higher programming costs and lower ad revenues. STAR was also hurt by an ad decline, particularly in India, and saw costs rise due to the new regional channel launches in India. News Corp.’s Asian arm did, however, record higher affiliate revenues.

Cable network programming proved to be a bright spot, with revenues up by 11.4 percent to $1.4 billion and operating income gaining 30 percent to $429 million. FOX News Channel remains a strong performer, and the company also posted increased earnings from the Fox International Channels.

SKY Italia’s revenues fell 7 percent to $924 million, delivering an operating income of $63 million, down 35 percent. At the end of the quarter, the platform had 4.8 million customers.