Profits hit $422 mil aa revs rise 22%
NEW YORK — News Corp. posted a stellar 260% surge in profit last quarter, fired up by filmed entertainment, which tripled earnings. Conglom also piled up cash from worldwide homevideo and TV sales and syndication.
Profit at Rupert Murdoch’s conglom soared to $422 million from $162 million for the fiscal first quarter ended Sept. 30 compared with the same period a year earlier. Revenue rose 22% to $4.6 billion. Operating income grew 31% to $719 million, including a $117 million loss from new Italian satellite biz Sky Italia.
Star TV in Asia turned a profit for the first time — auspicious timing since Star’s former chief, James Murdoch, was just named head of BSkyB. The giant U.K. satcaster hit an impressive 7 million digital subs.
During a conference call, Rupert Murdoch somewhat testily defended his son’s appointment, blasted by some as blatant nepotism. He said it’s “absolute nonsense” to infer that BSkyB may have been destabilized by the brouhaha over its new CEO. “It’s a happy ship, and they’re looking forward to new leadership,” he said.
At filmed entertainment, profits jumped to $328 million from $100 million. Revenue rose 41% to more than $1.2 billion on worldwide home entertainment contributions from “Daredevil,” “Phone Booth” and a number of catalog titles. Company also cited higher syndication profits on the initial releases of TV series “Angel” and “Judging Amy” and DVD sales of TV shows “The Simpsons,” “Buffy the Vampire Slayer” and “24.” The bonanza was only partly offset by high launch costs for “The League of Extraordinary Gentlemen.”
News Corp. chief operating officer Peter Chernin said the company made its first concerted effort to market DVDs to consumers in its six key territories overseas, boosting sales. He also cited fortunate timing of theatrical releases to the video and TV market, cautioning that the huge gains may be hard to replicate.
However, both he and Murdoch seemed quite upbeat about their upcoming releases, noting “Master and Commander: The Far Side of the World,” with Russell Crowe; “Cheaper by the Dozen,” with Steve Martin; and the Farrelly brothers’ “Stuck on You,” starring Matt Damon. Chernin also mentioned new homevid releases of “Bend It Like Beckham” and “28 Days.”
Fox net takes hit
News Corp.’s TV revenue was about flat at just over $1 billion. Operating income fell 4.7% to $179 million. Higher profit (up 7%) at Fox’s TV stations was offset by a ratings fall at Fox Broadcasting Co. as it struggled to make up for year-earlier hit “American Idol.” Fox, which also incurred cancellation costs for several series and projects, suffered a 20% decline in primetime ratings year on year. Fox Broadcasting’s losses widened to $41 million, Murdoch said.
TV stations gained market share and benefited from lower local broadcast and promotional costs and duopoly savings.
Cable pumps profits
At cable networks, revenue rose 13% to $627 million and operating income jumped 12.7% to $133 million. Profit rose 14% at Fox News and 4% at Fox’s regional sports nets. FX had higher costs for original programming and a few cancellations as well, but viewership was up 20% year on year, fueled by “Nip/Tuck.”
A new division, Direct Broadcast Satellite Television, posted revenue of $264 million and an operating loss of $117 million. Unit will eventually house Hughes Electronics’ DirecTV satcaster once that acquisition closes.
Newspapers saw revenue grow 22% to $739 million. Operating profit surged to $102 million from $57 million. Jump reflected circulation revenue in the U.K. and advertising strength in Australia. News Corp. also owns the New York Post.
In book publishing, led by HarperCollins, revenue and profits were basically flat at $347 million and $59 million, respectively.
News Corp.’s magazines and inserts biz saw revenue and profit each rise 14% to $222 million and $58 million, respectively.