News Corp. posts solid 1st qtr.

Fox parent News Corp. reported stronger earnings for its first fiscal 1993 quarter, though its film division saw a dramatic drop in operating income.

News Corp. reported a 70% increase in earnings for the three months ended Sept. 30, rising to $ 141.2 million (70 cents per American Depository Reciepts) compared to earnings of $ 82.9 million (56 cents) for the similar period a year ago.

Revenues dropped 8.8% to $ 1.89 billion for the quarter versus $ 2.07 billion a year ago, largely a result of the company’s sale of its San Antonio newspaper holdings and its sale of a 50% stake in its Australian magazine group to the public over the past year.

But operating income at the company’s filmed entertainment division, which includes Twentieth Century Fox Film, tanked 67% to $ 11.5 million for the quarter from $ 35.4 million for the similar period a year ago. Revenues for the division fell less dramatically, with a 13% drop to $ 394.2 million from $ 454.6 million a year ago.

The decline was expected by analysts, however, since last year’s similar-period performance was almost entirely due to the homevideo release of the blockbuster “Home Alone.”

‘No surprises’

“There were no surprises, ” said Victor Shvets, a media analyst with MacIntosh Securities in Australia. Wall Street seemed to agree, with News Corp. The company’s ADRs closed up 50 cents at $ 38, with a thin 33,200 receipts trading.

First quarter film revenues began to benefit from the late September release of “The Last of the Mohicans,” Shvets added, with a stronger second quarter expected due to the scheduled release of four major films in December: “Home Alone 2,””Hoffa,””Toys” and “Used People.”

Earnings for the Australian-based company as a whole would have been higher, except for $ 16.3 million (9 cents) foreign currency loss for the quarter due to its Ansett airline holdings.

Operating income in the U.S., which accounts for more than half of News Corp.’s operating profit, fell 8.5% to $ 180 million compared to the year before and operating income from Oz and the Pacific Basin fell 14.6% to $ 55.9 million.

BSkyBoost

Operating income in Britain soared 78% to $ 80 million. The bottom line was boosted by BSkyB, the company’s 50%-owned satellite-to-home venture, which reported a profit in the quarter compared to a loss a year ago.

Large gains were recorded by Fox Broadcasting and Fox Television Stations. News Corp. reported revenue growth of 50% over last year for Fox Broadcasting due to the successful presale of its advertising time for the 1992-93 broadcast season, totalling $ 550 million.

Overall, the consolidated TV division’s revenues rose 21% for the quarter to $ 270 million from $ 223.2 million a year ago. Operating income for the TV division rose 39% for the quarter to $ 53.4 million from $ 38.2 million last year.

Net interest cost for the quarter declined 19.3% to $ 150.5 million from $ 186.5 million in the prior year as interest rates declined and the company cut its debt levels.

Operating income for the newspaper division grew 34% in the quarter to $ 119. 9 million, from $ 89.7 million the year before. Revenues for the segment grew 15 % to $ 583.6 million from $ 507 million the prior year.

While operating income for the magazine and inserts division rose 20% to $ 70 .1 million, the segment’s revenues fell 6% to $ 276.5 million for the quarter.

Bookish on earnings

Results at the company’s book division worldwide, HarperCollins, continued to slide, and were 20% lower than a year ago. The results were “in line with expectations,” the company said in its release and said the decline was “primarily due to lower earnings in the U.S.” Overall, the company’s book publishing revenues dipped 3% to $ 328 million, and operating income dropped to $ 59.9 million.

Since the end of the quarter, News Corp. has raised about $ 1.5 billion to further reduce bank debt through global offerings of shares and debt securities. In a release, News Corp. dubbed an investment grade credit rating its “pre-eminent goal.”

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