News Corp. revs, profits pumped
HOLLYWOOD — News Corp., like other media congloms this summer, is benefiting from a rebound in advertising and continued strong homevid sales.
The media giant’s profits rose 8% and revenue jumped 20% last quarter with gains across the board, led by U.S. filmed entertainment and television.
Execs extolled News Corp.’s strategic prowess and geographic reach, as well as the Australian-based conglom’s current push to make the U.S. its new official home. The company’s board just approved plans to reincorporate Stateside.
Chairman-CEO Rupert Murdoch defended to Wall Street the hefty investments he’ll need to grow his worldwide satellite empire. “We wanted to return the company to a strong growth company, not a cash cow,” he said during a conference call, although that may squeeze profits for the next few years.
New sat channels planned
Murdoch also said News Corp. is working on “half a dozen” new channels to launch on DirecTV. “I would hope in the next 12 months, a couple of channels, and another couple the year after — of different importance and size,” he said. Company has announced one so far, a reality channel.
Profit of $399 million was up from $370 million the year before. Revenue stood at $5.5 billion, and operating income surged 31% to $747 million for the fiscal fourth quarter ended in June.
For the full year, profit rose to $1.6 billion from $1 billion. Revenue was up 20% to $21 billion.
In filmed entertainment, operating income rose 7% to $91 million and revenue grew 25% to nearly $1.4 billion.
Company cited strong worldwide theatrical revenue and higher contributions from catalog titles in pay and free TV. Homevideo perf was buoyed by “Cheaper by the Dozen” and catalog fare “Ice Age” and “There’s Something About Mary.” Pay TV titles included “X2,” “28 Days Later” and “Bend It Like Beckham.” Gains were partly offset by marketing costs for a string of spring and summer releases including “The Day After Tomorrow,” “DodgeBall” and “I, Robot.”
Risk management strategy
Chief operating officer Peter Chernin, who recently renewed his contract at the conglom, said the studio’s “proven risk management strategy delivered record profits.” He said the studio is focused on containing costs and noted that five pics in a row had opened to more than $20 million in box office. He expects a sixth with “Alien vs. Predator” — all leading to big homevid dollars. “We are confident we can deliver huge filmed entertainment profits going forward,” he said.
In television, income rose 21% to $351 million and revenue grew 9% to $1.28 billion on earnings improvement at the Fox Broadcasting Co. and Fox television stations and higher contributions from Star in Asia.
Stations grew operating income by 15% on strong primetime ad revenue led by the success of “American Idol” and local news — offset in part by primetime ratings weakness at UPN.
At Fox Broadcasting, income rose $22 million as higher pricing for the primetime entertainment schedule was partially offset by a 10% decline in primetime ratings and higher promotional costs for the launch of several new series.
Star profit up 52%
At Star, profit rose 52% and revenue 18%, driven in part by the Star Plus channel in India.
Cable network programming saw operating income up 60% at $154 million. Revenue rose to $702 million from $669 million as cable channels Fox and FX fired ahead. Unit was also freed from the Dodgers’ red ink after the baseball team was sold.
Income at Fox News Channel surged 40% year on year.
At Italian pay TV platform Sky Italia, losses narrowed to $19 million from $68 million for the prior year on revenue of $1.7 billion as the service hit 2.7 million subscribers.
Newspapers saw profits up 14% to $144 million.
Book publisher HarperCollins took earnings to $6 million from $4 million.
Operating income from magazines and inserts dipped to $66 million from $70 million.