News Corp. Profit Rises 27% on Ads, DVD Sales

News Corp., Rupert Murdoch’s media conglomerate, reported a 27% increase in fiscal first-quarter net income Wednesday, lifted by brisk DVD sales and stronger ad revenue at its newspapers and television networks.

Earnings were $536 million, or 36 cents for each American depositary receipt, in the quarter ended Sept. 30. That’s up from $422 million, or 32 cents, a year earlier.

Revenue climbed 12% to $5.2 billion.

The company released its earnings hours after an Australian federal court approved News Corp.’s request to change its incorporation from Murdoch’s native country to the United States. Shareholders have overwhelmingly approved the move to Delaware, which could be completed by Nov. 12.

“The big news is that now News Corp. is an American company, and more investors can buy their stock,” said Richard Greenfield, a media analyst with Fulcrum Global Partners.

Sure enough, Liberty Media Corp., which is controlled by cable TV investor John Malone, announced Wednesday that it had entered a transaction with Merrill Lynch & Co. to buy $1.5 billion in News Corp.’s voting stock.

News Corp.’s largest division, filmed entertainment, reported operating profit of $285 million, down from $328 million a year earlier. DVD sales of TV’s “The Simpsons” and George Lucas’ “The Star Wars Trilogy” shored up earnings that were pinched by high film marketing costs.

The television segment reported operating profit of $233 million, up 30%. It was boosted by higher ad revenue for the Fox Broadcasting network, which narrowed its loss to $9 million, from $45 million last year.

In a conference call with analysts, Lachlan Murdoch, News Corp.’s deputy chief operating officer, cautioned that ad revenue this quarter at the company’s television stations appeared to be softening.

The company’s cable channels have been a bright spot. They reported operating profit of $196 million, up 47% from last year’s results. That was due to higher ad revenue at the FX entertainment channel and Fox News Channel, whose operating profit grew 20%. Increased advertising revenue more than offset the high costs of political convention coverage.

Meanwhile, the company’s satellite television division reported a first-quarter operating loss of $121 million, compared with a loss of $117 million last year. Newspaper operating profit rose to $120 million from $102 million a year earlier.

News Corp. also benefited from the sale of the Los Angeles Dodgers, which a year earlier reported an $8-million loss.

Shares were up 94 cents at $17.74 on the New York Stock Exchange.