News Corp. Reports Robust Profit Growth

May 10, 2006  •  Post A Comment

Rupert Murdoch’s News Corp. reported fiscal third-quarter net income of $820 million, more than doubled from a year ago, as ratings strength at the company’s broadcast and cable networks outweighed a decline at the movie studio.

While the company’s cable networks continued to be a driver of growth for the media giant, the Fox Broadcasting Co. was also a major contributor. Revenue climbed 3 percent to $6.2 million as television business strength was tempered by declines at the movie studio. News Corp.’s profit was 27 cents a share, compared with 14 cents a share a year ago, when the company reported net income of $400 million.

News Corp.’s results reflect the improving fortunes at Fox, which has been on fire this year thanks to ratings juggernauts “American Idol,” “24” and “House.” The company also continues to benefit from the ratings leadership of Fox News Channel, which is also beginning to collect higher payments from cable and satellite companies.

The company said Fox’s ratings success helped the broadcasting unit post operating income growth of 29 percent to $286 million as the higher ratings translated into more advertising dollars. The unit also benefited from not broadcasting the Super Bowl, which last year drove Fox’s TV operations into the red.

At the cable unit, Fox News’ strength, along with ratings gains at FX and the company’s regional sports networks, led the division’s operating income to rise 23 percent to $211 million. FX and the sports channels saw increases in the number of homes able to receive the channels and booked higher payments from cable and satellite operators. That offset higher programming costs linked with the sports channels’ broadcasting of professional hockey games and higher costs associated with TV shows on FX.

Meanwhile, the company’s film division reported that operating income declined 10 percent to $225 million. The division failed to match year-ago results, which were buoyed by strong DVD sales.