News Corp. reports 47% jump in third-quarter earnings
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News Corp. reported a 47% jump in net income in its third quarter, buoyed by strong performances from its cable and film groups.
The media conglomerate reported net income of $937 million for the quarter ended March 31, compared with $639 million from the same time a year ago. Revenue increased to $8.4 billion, up 2% from a year earlier.
“Once again, News Corporation showed strong operational momentum in the quarter, driven by significant growth at our Cable Network Programming and Filmed Entertainment segments,’ Chairman and Chief Executive Rupert Murdoch said in a statement.
The company’s cable networks reported operating income of $846 million, a 15% gain over the prior year -- thanks to double-digit growth at Regional Sports Networks, FX Network and Fox News.
The film studio showed an operating income of $272 million, an improvement of nearly 10% from the same period a year ago. Movie results reflected strong box office and home entertainment performances of ‘Alvin and the Chipmunks: Chipwrecked’ and ‘The Descendants.’
However, the British phone hacking scandal continues to drag on the company’s earnings. News Corp. took a charge of $63 million in costs related to the ongoing investigation of conduct at the now-shuttered News of the World tabloid.
News Corp. has been buffeted by the continuing fall-out from the British phone hacking scandal, which erupted last summer when it was revealed that a detective working for one of News Corp.'s tabloids had hacked into voice mail messages left for a missing schoolgirl who was later found dead.
Earlier this month, a committee of British lawmakers issued a blistering report finding that Murdoch had ‘exhibited willful blindness’ toward the illegal phone hacking at the now-shuttered News of the World and is ‘not a fit person’ to lead a major international company such as News Corp.
News Corp.'s board subsequently issued a unanimous statement affirming the directors’ confidence in Murdoch and his ability to run the company he built from a single newspaper in Adelade, Australia.
Saudi Prince Alwaleed Bin Talal Bin Abdulaziz, News Corp.'s second largest shareholder, also voiced his continued backing of Murdoch in an interview with the Guardian, but expressed concern that the situation is damaging the reputation of the company beyond its British newspapers.
‘I really hope that this is behind us because really it is not helping the name of the company,’ he told the Guardian. ‘We hope that this page is folded and put behind us because really it is not something to be proud of.’
Murdoch’s youngest son, James Murdoch, resigned as chairman of satellite broadcaster British Sky Broadcasting in April, ahead of what was expected to be a critical report from the parliamentary committee on his handling of the ethics scandal.
Media regulators in Britain are evaluating whether BSkyB is a ‘fit and proper’ holder of a broadcast license, because of News Corp.'s nearly 40% stake. Some politicians have used the Culture, Media and Sport committee’s critical report to call for swift action -- a call the regulators have resisted.
-- Dawn C. Chmielewski
the Regional Sports Networks (“RSNs”), FX Network and FOX News