News Corp Earnings Up Surprising 11%, Fox News Income Grows 41%
LOS ANGELES — Media conglomerate News Corp. posted a surprise increase in quarterly profit Wednesday, but Chief Executive Rupert Murdoch said the company might not meet its goal of charging fees for online versions of its newspapers by next summer.
Profits at the wide-ranging company got a boost from the box-office success of "Ice Age: Dawn of the Dinosaurs" as well as from strength at its cable networks like Fox News Channel.
But advertising revenues fell during the quarter that ended Sept. 30 at newspapers worldwide and local TV stations in the U.S.
Murdoch said he "wouldn't promise" to begin charging for online access to the company's newspapers, which include The New York Post or The Times of London, by next June.
When asked on a conference call what the delay was, Murdoch said, "with everything."
"There is a huge amount of work going on. It is not just with our sites, but with other people," said Murdoch, 78.
The company is facing multiple challenges, including an advertising downturn and the shift of readers to the Internet, although local TV ad revenues were recovering this month and seen improving in December, Murdoch said.
Newspaper and TV station earnings fell but they were more than offset by cost-cutting and gains elsewhere.
The Wall Street Journal, which already charges for online content, remained slightly profitable, but lower ad revenue offset increases in circulation and higher newsstand prices.
Net income for the company's fiscal first quarter, which ended Sept. 30, increased 11 percent to $571 million, or 22 cents per share, compared with $515 million, or 20 cents per share, in the year-ago period. Analysts surveyed by Thomson Reuters were expecting a drop to 18 cents per share.
Revenue fell 4 percent to $7.2 billion, in line with estimates.
Citing better movie performance and an improving market for local TV ads, News Corp. also raised its annual forecast for fiscal 2010 operating profits to growth in the "high single- to low double-digit" percentages from its 2009 level of $3.44 billion. The fiscal year ends in June.
Earlier, News Corp. predicted only "high single" digit percentage gains.
Quarterly profit in the studio, 20th Century Fox, surged 56 percent to $391 million thanks to the theatrical success of "Ice Age" and "X-Men Origins: Wolverine" on home video. "Ice Age" is expected to continue to benefit the company throughout its fiscal year as it moves to home video and other markets.
Cable networks, including Fox News Channel, saw operating income grow 41 percent to $495 million, but newspaper earnings shrank more than 80 percent to $25 million.
Meanwhile, a turnaround effort continued at social networking hub MySpace, which Chief Operating Officer Chase Carey called "a work in progress."
Traffic to the site was still falling and the site would earn about $100 million less than the $900 million it was promised in a three-year deal with Google Inc., which provides searches on the site, because MySpace did not attract enough visitors, Carey said. The deal expires next year.
News Corp.'s shares were up 39 cents, or 3.4 percent, at $11.95 in after-hours trading following the earnings release Wednesday, after closing up 12 cents at $11.56.
Loading comments…
RYAN NAKASHIMA | 11/ 4/09 07:22 PM |