News Corp. Sees Profit Increase

NEW YORK: For the first quarter, News Corporation recorded a net income of $571 million, an 11-percent increase on the year-ago period, on revenues that slipped 4 percent to $7.2 billion. 

“I am pleased that News Corporation has delivered exceptionally strong results this quarter, despite continued macro-economic challenges," said Rupert Murdoch, the chairman and CEO. "Operating income growth was led by gains at our worldwide cable network programming businesses and renewed momentum at our Filmed Entertainment segment, reflecting our strong slate of films at the global box office. The strategic steps we took last year to ensure stability during the downturn have proven successful, with significant cost reductions offsetting much of the revenue declines in our Television and Newspapers and Information Services segments. The economies in which we do business are clearly in better shape than they were a year ago, and we have further positioned our operations to take advantage of the improvements we are seeing globally. We will continue to manage our businesses smartly and confidently under the security of a strong balance sheet.”

Filmed Entertainment boosted operating income by 56 percent to $391 million, on revenues that rose to $1.5 billion, thanks in part to the theatrical success of Ice Age: Dawn of the Dinosaurs, the home entertainment performance of X-Men Origins: Wolverine and the home entertainment and pay-TV performance of Taken. Twentieth Century Fox Television, meanwhile, reported decreased contributions versus a year ago, primarily due to lower contributions from home entertainment releases and reduced U.S. television revenue.

In the Television segment, however, revenues fell to $765 million, with operating income plummeting to $38 million from $83 million. This was a result of lower contributions from the Fox Television Stations, where ad revenues were down, and FOX Broadcasting Company, which experience reduced ad revenues as well as higher prime-time programming costs driven by increased license fees for returning series.

Cable Network Programming was a bright spot, with revenues increasing to $1.6 billion and operating income up to $495 million from $350 million. The gains we led by FOX News Channel (FNC), the Fox International Channels and STAR, among others.

SKY Italia, however, reporting a lower operating income of $128 million, due to increased programming costs, higher soccer costs and the addition of 16 new channels over the year ago quarter. The 4.8 million quarter-end subscriber base remained unchanged compared with fiscal year end.