News Corp. Sees Spike in Profit

NEW YORK: News Corporation reported net income of $2.38 billion for the quarter ended December 31, 2012, up from the $1.06 billion in the same period a year ago.

Total revenue for the period was $9.43 billion, a 5-percent increase from the prior year quarter. The revenue increase was led by the 18-percent growth at the Cable Network Programming segment. The second-quarter results included $56 million in costs relating to the ongoing investigations from the closure of News of the World, compared to $87 million in the same period in the year prior. There were also $23 million in costs related to the proposed separation of the company’s entertainment and publishing businesses.

Cable Network Programming delivered operating income of $945 million, up 7 percent, driven by an 18-percent increase in revenue. Contributions from the domestic channels increased 9 percent, while the international cable channels’ earnings contributions increased 3 percent. Affiliate revenue grew 13 percent and 42 percent at the domestic and international channels, respectively. Ad revenue for the domestic cable channels was up 8 percent, with a 29-percent gain from the international segment. There were increased expenses for cable network programming of 29 percent, mainly due to increased sports programming costs.

Filmed Entertainment had a segment operating income of $383 million for the quarter, down slightly from the year-ago’s $393 million. Television had a quarterly segment operating income of $224 million, a gain of 19 percent year-on-year for the quarter. Sky Italia generated a loss of $20 million in the quarter, compared to the positive income of $6 million in the same period a year ago. The decline was from higher programming expenses, including nearly $30 million of rights costs largely due to the expanded UEFA Champions and Europa League coverage. Publishing had an income of $234 million, an improvement from the year ago’s $218 million.

Rupert Murdoch, the chairman and CEO of News Corp., said: “News Corporation’s fiscal second quarter performance reflects our strong momentum. Double-digit gains in our Cable and Television businesses, along with improvements in our Publishing segment, drove revenue and earnings growth even as we seized opportunities to invest in our core businesses for long-term and sustainable growth.

“The strategies we executed against in the quarter continue to bolster News Corporation’s competitive position and enhance our ability to benefit from global demand for content, especially sports programming. As we make progress toward the proposed separation of our entertainment and publishing businesses later this year, I am confident in the future prospects for both businesses.”