Profit Drops 13 Percent at News Corp.

NEW YORK, November 8: Driven in
part by the theatrical releases of The Simpsons
Movie and Live Free or Die Hard, News Corporation’s first-quarter revenues rose 19 percent
to $7.1 billion, while profit fell 13 percent to $732 million.

The company reported an operating
income of $1.05 billion, 23 percent up on the year-ago period, thanks to double-digit
percentage increases at the filmed entertainment and cable network programming
segments and a $61 million improvement at SKY Italia. The fall in net income
was attributed to difficult prior-year comparisons; Q1 results last year
included gains on the sale of shares in Sky Brasil and Phoenix.

Filmed entertainment was one of
News Corp.’s best-performing divisions, with a 51-percent rise in operating
income to $362 million on revenues of $1.6 billion. The Simpsons Movie has
grossed over $524 million in worldwide box office, and Live Free or Die Hard has surpassed $375 million in worldwide box office.
Twentieth Century Fox Television reported increased contributions versus the
first quarter a year ago, primarily led by home entertainment sales and
international television, most notably from Family Guy and Prison Break.

The television segment reported
first quarter operating income of $183 million, a decline of $9 million versus
the same period a year ago as improved results from the FOX Broadcasting
Company and STAR were offset by lower contributions from the Fox Television
Stations and a full quarter of losses at MyNetworkTV. FOX benefited from
increased ad revenues as well as lower prime-time programming and promotional
costs. STAR, meanwhile, experienced 22-percent revenue growth, driven by
advertising and subscription revenue gains, primarily in India. Fox Television
Stations’ operating income declined 9 percent as a result of lower political
advertising revenues and decreased advertising revenues at the MyNetwork
affiliated stations. Television revenues totaled $1.1 billion.

The cable network programming
division reported operating income of $289 million, an increase of 16 percent,
with increased contributions from Fox News Channel, the Regional Sports
Networks and the Fox International Channels being offset by launch costs
associated with the Fox Business Network and the Big Ten Network. Revenues in
this segment were up to $1.1 billion.

SKY Italia reported first quarter
operating income of $48 million, versus a loss of $13 million a year ago, on
revenues of $747 million. This improvement primarily reflects subscriber additions,
with 410,000 net new subscribers added over the past 12 months, bringing SKY
Italia’s subscriber base to 4.24 million at quarter end.

—By Mansha Daswani