News Corp. revenue up 10%, Fox operating income nearly triples
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Thanks to Fox News, strong DVD sales and a better performance from television stations, News Corp. reported a 10% jump in fiscal second-quarter revenue to $8.7 billion and big jumps in operating income at its movie and television studio and cable television group.
Operating income for 20th Century Fox jumped to $324 million from $112 million in the same quarter a year earlier, driven by the DVD performance of summer box-office hits ‘Ice Age: Dawn of the Dinosaurs,’ ‘X-Men Origins: Wolverine’ and ‘Night at the Museum: Battle of the Smithsonian.’ The studio’s summer 2008 releases that hit DVD in the fall of that year, such as ‘The Happening’ and ‘Meet Dave,’ performed much more poorly, making year-to-year comparisons relatively easy.
Because it was released near the end of the quarter, which ended Dec. 31, News Corp. didn’t report any revenue for box-office smash ‘Avatar,’ which it co-financed, though much of its substantial marketing and distribution costs were included.
“We think about 60% of profits will be ... over the next two quarters,” News Corp. Chief Executive Rupert Murdoch said in a conference call with analysts. “We plan to release the DVD as soon as possible. But it’s continuing for a great period in the cinemas.’
He later added that Fox was in ‘early talks’ with director James Cameron for an ‘Avatar’ sequel. ‘Being Jim Cameron, I wouldn’t hold your breath for an early one,” Murdoch quipped.
Cable continued to be News Corp.'s most profitable division, as operating income grew 35% to $604 million. Fox News continued to lead the way, though the company said there were increased contributions from its regional sports networks and international channels as well.
The conglomerate’s television division swung from a $2-million operating loss a year earlier to $29 million in operating income. Increased contributions from local television stations were offset by weaker performance by the Fox broadcast network.
Despite the tough market for print media, News Corp. reported a 30% rise in operating income for its newspapers unit to $259 million thanks to a mix of increasing revenue and cost cuts. Print advertising revenue for the Wall Street Journal rose 5%, while the New York-based financial paper’s online ad revenue increased 17%.
Earnings from News Corp.'s digital media group, which includes MySpace.com and IGN Entertainment, decreased by $32 million, the company said, because of lower advertising revenue.
The quarter included a $500-million pretax charge for a lawsuit settlement related to News Corp.'s division that inserts newspapers and other advertising material into newspapers.
Total net income for News Corp. last quarter was $254 million. In the same quarter a year earlier it lost $6.4 billion owing to a massive, $8.4-billion, impairment charge.
-- Ben Fritz and Dawn C. Chmielewski