News Corp. Reports Biggest Quarter in Three Years

News Corp., the media company controlled by Rupert Murdoch, on Wednesday announced its biggest quarterly profit in three years as the Fox film studio released the hit “X2” and the Fox News cable network sold more advertising.

Net income was $370 million, or 28 cents per American depositary receipt after the payment of preferred dividends, compared with a loss of $1.74 billion, or $1.40, a year earlier. Revenue from businesses News Corp. operated in both quarters rose 14.2% to about $4.37 billion, according to the company.

The year-earlier loss was mainly because of a write-down of the company’s investment in Pasadena-based Gemstar-TV Guide International Inc., whose founder has been accused of securities fraud.

Otherwise, all the units of Sydney, Australia-based News Corp. grew in the quarter, with revenue from filmed entertainment and cable television both rising 19%. The bets Murdoch has made at his company are paying off, analysts said.

“The numbers were fabulous,” said Merrill Lynch analyst Jessica Reif Cohen, who rates the shares “buy” and doesn’t own them. “For the first time, the non-Fox assets are beginning to show momentum.”

Murdoch, 72, began building his company when he inherited two newspapers in Australia. He has since turned News Corp. into a company with newspapers and television networks in the U.S., Europe, Asia and Australia.

Murdoch also plans to buy a controlling interest in satellite broadcaster DirecTV Inc. to gain another distribution system for its TV programs and movies.

News Corp. agreed in April to buy a 34% stake in Hughes Electronics Corp., the owner of DirecTV, for $6.6 billion. The planned purchase of the satellite-TV system, with about 11 million subscribers, hasn’t been approved by regulators.

Counting revenue from Sky Italia, which News Corp. bought in April, fourth-quarter revenue rose 20% to $4.59 billion.

The company’s ADRs, each representing four ordinary shares, rose 3 cents to $32.61 on the New York Stock Exchange.

News Corp.’s Fox Entertainment Group Inc., a publicly traded company, also reported earnings Wednesday. Fox, owner of the 20th Century Fox movie studio, said net income surged to $258 million, or 29 cents a share, from $40 million, or 5 cents, a year earlier. The company beat an estimate of 24 cents, the average forecast of analysts polled by Thomson First Call.

Fox television’s household ratings have risen 5.8% in the season that started in September. Fox, with its shows “Joe Millionaire” and “American Idol,” is the second-highest rated U.S. network behind General Electric Co.’s NBC among viewers 18 to 49, a group many advertisers pay a premium to reach. Fox’s ratings this season have risen 5.4% in that age category.

Operating income at News Corp.’s cable TV networks almost tripled to $96 million as the Fox News Channel, led by Chief Executive Roger Ailes, gained viewers with its coverage of the war in Iraq and with programming such as political talk show “The O’Reilly Factor.” Revenue at the division rose to $669 million.

At News Corp.’s filmed entertainment unit, operating income rose 13% to $85 million, according to the company. Revenue at the studio rose to $1.1 billion.

Newspaper operating income rose 7.7% to $126 million. Revenue increased 18% to $738 million.